Comments on: How to Set Up an LLC to Protect Yourself in Real Estate Investing http://www.allrei.com/articles/how-to-set-up-an-llc-to-protect-yourself/ Real Estate Investing Articles Thu, 20 May 2010 05:29:45 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Gene Urban http://www.allrei.com/articles/how-to-set-up-an-llc-to-protect-yourself/comment-page-1/#comment-5841 Gene Urban Wed, 29 Apr 2009 17:35:03 +0000 http://www.allrei.com/articles/2008/05/06/how-to-set-up-an-llc-to-protect-yourself-in-real-estate-investing/#comment-5841 Nice piece on LLC's. Just wanted to add a couple points from the mortgage side. Forming an LLC can invoke the due-on-sale clause included in many loan docs. Historically, most banks do not take this action, however, some are tightening the standards. This is especially true if you get behind on your payments. Another thing to think about is refinancing your loan. If the property is held in an LLC, many lenders will require it be taken out of the LLC for 6 months (a seasoning period) prior to condidering a refi. As always, it is best to consult an attorney to get professional counsel and to clarify options, risks and rewards. An insurance professional can also be handy in providing alternative liability protection instruments. Nice piece on LLC’s. Just wanted to add a couple points from the mortgage side. Forming an LLC can invoke the due-on-sale clause included in many loan docs. Historically, most banks do not take this action, however, some are tightening the standards. This is especially true if you get behind on your payments.

Another thing to think about is refinancing your loan. If the property is held in an LLC, many lenders will require it be taken out of the LLC for 6 months (a seasoning period) prior to condidering a refi.

As always, it is best to consult an attorney to get professional counsel and to clarify options, risks and rewards. An insurance professional can also be handy in providing alternative liability protection instruments.

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