Getting Real Estate Investment Loans Using LLCs (Banking Set Up)
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- เผยแพร่เมื่อ 17 พ.ย. 2019
- If you've followed my advice about protecting your assets and using LLCs then pay close attention to this video.
Using the suggestions in this video and you should be good as gold when getting loans for your real estate deals using banks and lenders.
There's a deposit strategy you'll want to follow and I explain it all in this short video.
WATCH NOW and please leave your comments and experiences with getting loans for your real estate deals below!
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
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Do issues occur when using this process with off shore accounts?
Thank you for this!
These videos are gold!! Thank you
Glad you like them!
REAP what you sow. Absolutely loved the video thank you
Glad you enjoyed it
You are awesome, your account has taught me so much.
Happy to hear that!
Great video thanks for sharing. good time about the K1!
Thanks for watching!
Thanks for the Wealth of Information.👌🏽
You are welcome
I am impressed. Didn't learn this in class. Thank you for the free content.
Glad it was helpful!
Great video!
Legend!
great video! thank you so much!
Glad it was helpful!
May God bless his soul for this valuable information.
Many many thanks
Thank you very much for this information Clint very timely by the way as I am going through that same issue. 👍
Thanks for the information. Your channel is super informative and straight to the point. Well done!
thanks
Excellent
Thank you for this video. You have one of the most professional and informative channels on TH-cam.
🙏🏾Amen🙏🏾
I LOVE YOUR VIDEOS!!!!
Thanks
Easy to understand and follow and straight to the point! Thanks.
This was a great video about using LLCs correctly
Dear Clint, you are amazing and I am your big fan. I appreciate your honest and thorough videos, here is my honest advice I wish you would also add your child company or services to find great investment rental properties with tenant management services included, I can see if you add that you will have largest empire ever in this business ever made!
Here is our other company that does just that: infinityinvesting.com
Love this. Very useful stuff.
I totally agree that LLCs are a smart strategy for real estate investing. I would suggest caution in terms of setting up a holding company LLC. We have one LLC that owns a mixed use commercial building and we can use that for our K-1 tax reporting. If we were to add a holding company, that would add complexity and cost to our annual tax returns. From what I understand, a holding company LLC adds another layer of legal protection but it does so at a cost
The holding LLC is typically used for annuity and/or to consolidate ownership of multiple LLCs. In your example if you have a commercial loan and the lender asks for copies of your annual tax return you must approach the holding LLC with caution so as not to throw off how the return looks when presented to your lender. Thanks for the great contribution.
@@ClintCoons I’d like to have you one of my educational webinars for financial advisors.
Thank you so much for putting out such a great contents. Been a fan since I saw your first video 💯
I appreciate that!
THANKS CLINT 💯
You are welcome.
Wonderful tax insight. Keep up this great content.
Much appreciated!
This is a great video, thanks for sharing this knowledge
Glad you enjoyed it!
Amazing content. Thank you.
Thanks
AWESOME!
Thanks!
Fantastic content! Thank you! You deserve more subscribers...
Ii
O
Great video
Glad you enjoyed it
Your awesome!!!!
He is
Subscribed
You just blew my mind this makes so much sense
Good stuff as always Clint. What if its a 1031 exchange from residential to commercial?
Without knowing more, it should not make a difference..
Clint, you always have great videos and seem very knowledgeable. I have a number of rental properties and it’s on my list to get more organized. How do I contact you for further services? Oh I just read the top of the video discription. I see you have it all listed there. I should be in touch
Thanks
Mike
Your sooo great!!!! Do you have any classes you teach in person? I’m located in DC But I’ll travel to hear good information in person anytime lol
With Covid we have suspended all live classes and gone virtual. This Friday I will be hosting a youtube live video on using IRA for investing and on the 18th I will be teaching a one day on Tax and Asset Protection for real estate investors. I will post links to both next week.
Real Estate Asset Protection okay great! Thanks for the response
Best comment ever. They want to know how much money you spent on wine last month
Great information, thank you. In the first scenario with the 20k, after seasoning in my personal account is the loan made to me personally or will the loan and deed be in the name of the LLC and I am just making the down payment for the LLC?
Typically it is to you then you transfer the property into the LLC
After 4 years of investing full time I am told to “go back to work” by the lenders in order to get financing. This video really helps me learn how to structure my business to qualify for lending and take it to the next level. Thanks again!
Thanks for watching.
Wow....that was an excellent video and you just gained another sub. I'm a Real Estate and Mortgage Broker in Los Angeles. Question: why Wyoming and Delaware? I heard about Delaware many years ago and that mostly everything in Delaware has been decided on is the reason you choose that state...is that the true please enlighten me on both states or point me to a video you have done on the subject. Thanks.
For residential where you are not taking title in the LLC I like WY because it is less expensive. From a legal standpoint both offer the same protections. To your point, most 3rd parties are more comfortable with DE because they assume its laws are more settled. Thus, if obtaining a loan with an LLC I elect DE.
Important topic. Any thoughts on the due on sale clause?
Good stuff, explaining everything very thoroughly!
I bless the day I signed up with Anderson Business Advisors! Sunny days ahead! Great video!
Thank you.
Hey Clint! I am recommending that my borrowers just do 3 months or more.
Excellent. Do you work with many investors?
Great content Clint. I only wish I had watched these videos before purchasing my first investment property in my own name. The property is located in Atlanta, Georgia and was purchased using a traditional loan. The original lender sold my loan to Stern Lending. Now that I have an LLC created, I have requested a transfer from my lender. Stern does not want to transfer the loan and has suggested this I refinance. I’ve also scheduled a consultation with a business attorney but do you have any advice to offer me?
If you move your property into an LLC it would be very unlikely if the lender is willing to assign the mortgage. My recommendation would be to move the property into the LLC and leave the lender out of the equation. Could the lender accelerate your loan if it is discovered? Yes but I rarely see lenders take this type of action unless the borrower has missed payments etc.. Another idea is a land trust for your property then transfer the land trust into the LLC.
Put in a land trust and then put the trust in LLC Clint has a vid on this also
I LOVE CLINT AND ANDERSON ADVISORS
Imma use these for monopoly
Awesome tip. Thank you for the lesson.
Glad it was helpful!
Thanks Clint for the great info. If I am buying only one investment property with a group of investor friends and getting conventional loan under only my name, should I still need a holding company in addition to the LLC that I create in the state where I buy?
Only if you want anonymity but you must definitely put together a JV LLC to protect your interests
@@ClintCoons Thanks for your response!
Hi Clint...I cant stop watching your videos. I have a "simple" question, which if you cant answer here I may give you a call. I currently have a residential condo(financed) and leased out for an extremely attractive monthly rent. I want to start to expand my portfolio. If i want to transition that from my Schedule E to say an WY LLC that I can enter into a master agreement with a C Corp I own, is there any easy way to do that other than going through the process of closing in the LLC again with me as a cosigner? If they would even allow that. Thank you.
Sign up for a free strategy session. See the show notes for the link.
How can a general partnership be setup such that one partner (of two) retains their annual qualification for medicaid as the general partnership earns a profit on interest on private money loans throughout the year?
Thank you for the great video. Do you recommend having the ""cash LLC" under the parent holding LLC as well? Or a more complex structure. Thanks
I typically like to separate the cash holding LLC out and keep it apart.
@@ClintCoons what is a cash LLC?
@@ca44gmail An LLC set up to hold your savings and investments (brokerage account, crypto, syndications, etc.)
Quick question with the WY HoldCo: if it's taxed as a partnership, there has to be more than one member, correct? Who/what would be the other member?
You would need to use another entity like a management company with a small interest.
@@ClintCoons Got it, thanks.
This is great information!!! My only question: When you want to transfer funds from the K-1 rental income account, do you have to transfer it first to one of the LLC's that it owns, then transfer the funds to your personal account? Or can I just transfer it straight to my personal account two months in advance.
My second Question: If I do not have a second partner to create the K-1 account, what other alternatives do I have?
Marcus it must run through the LLCs and out to you. Thus, the holding LLC will collect funds from the real estate LLCs
So true! My experience, once the LLC is introduced in a conventional loan application, they need all the information on the LLC assets and taxes. Much better to avoid
Thanks do you have a video or info if I’m putting down the 20K and using a hard money lenders money to purchase the property - how to set up the LLC - is it the same process?
Same process.
Awsome stuff, can I get a business checking account with a disregard LLC?
BX STAND UP!!!
Yes you can.
Are there books you can recommend for helping learn these instruments of protection for the layman who is starting on this
Funny you should ask: www.amazon.com/Asset-Protection-Real-Estate-Investors/dp/0979786045/ref=sr_1_2?keywords=asset+protection+real+estate+investors&qid=1574485533&sr=8-2
Hello Clint I like this video so I have an llc but how do I make it into a disregarded llc and is it a good idea to use it when buying my first property? Any help will be appreciated thanks
The tax election is made when you obtain your EIN for the LLC. To be a disregarded LLC you can only have one member. Disregarded will avoid having to file a tax return but you must balance that against the state where it is created. A disregarded LLC can only have one owner and some states do not protect the interest in a single member LLC I.e., no charging order protection.
@@ClintCoons perfect thank you yeah that I will be the only member on my llc and I’m from Virginia so this is very useful info thank you Clint I will try that.
Thanks for the input , I have an LLC for the pass 4 years and don’t know how to use it , yes I just refinance and it got a little frustrating for what they asked for , thanks for the 411
You are welcome.
So, new to the channel. I have been thinking about this scenario. My problem is I don't know how to get funds into the disregard LLC. Are the funds in the disregard LLC the shares you received from other LLC?
I don't follow. If you are the LLC member then you will contribute the funds to the LLC I.e., write a check. Is that what you are asking?
@@ClintCoons ok, just deposit the check into the LLC.
Your channel is so informative. Wish you have office in va
Maybe one day!
When you say set up as a Partnership do you mean do a Limited Liability Partnership instead of the LLCompany?
I am referring to the tax status
im planning to invest in short term rental log homes , im looking at smoky montain area ... how do i lear n weather Tenn or NC is the better state llc/taxes and laws
I invest in NC and I can attest that the property taxes where I invest are very low. A solution would be to join reia's in each state and speak with other investors.
I just purchased my first rental units and I'm not sure what type of llc to open I plan to buy another within 2 years I would love to talk to you furthermore and perhaps get one set up. Where may I be able to reach you??
You can set up a strategy session with this link: aba.link/30minSession
Can you compare commercial property Delaware vs Wyoming LLC What differences?
They are pretty much the same but lenders on larger deals often prefer DE over other states. It really comes down to the state that has more entity case law and DE wins hands down.
If you set it up as an scorp would all the holding be s corp or can you choose a different entity for each holding company
Could you give me an example? If you have an S-corp as your holding company for your various LLCs then all the income will flow through the S-Corp.
If you go with the holding company / partnership scenario, do you still hold the investment funds in the holding company, and then transfer them down to personal when required 2 months in advance or does that change?
yes, you need to season the funds in your personal account.
In a partnership owning llc structure, if the partner gets sued does it put all the properties held by the llc in jeopardy?
No but if the LLC is sued then yes all the property held by the one LLC is in jeopardy. Hence, place one property per LLC.
Hey Clint,
I haven't heard much about Delaware LLCs for RE investing, can these be set up as diregarded entities? or is the Wyoming one preferable for that process to work?
I talk about DE LLCs. It depends on your strategy. Typically I use DE for commercial deals.
Hey Clint, would you have your WY holding own your DE holding? Or would you just treat the DE as a separate secondary holding partnership?
@@GM1024 Keep them separate
@@ClintCoons is it smart to give both holding companies the exact same name being they're in 2 different states? Like for example, Good Business Holdings LLC (in Wyoming) & Good Business Holdings LLC (in Delaware)
@@lilharv7376 Never. It makes it impossible to open bank accounts with the same bank.
Is the K-1/holding LLC the same as the disregarded LLC at the top? Or do you have two separate Wyoming LLC’s?
It is a separate WY LLC. The WY LLC is the holding LLC.
Real Estate Asset Protection ok so in total, I’d need 2 WY LLCs correct?
Thank you, I have 5 properties but can’t put in LLC yet.
Why?
Real Estate Asset Protection All properties have loan not cash and having personal loan is cheaper than commercial loan. Any advice? All
Properties are in Delaware. Thank you.
@@pamcovey4759
Ever thought about using a quit claim deed to transfer your interest into your LLC? It is possible that it could trigger a due on sale clause, if your lenders have it. Might be worth speaking to an attorney, and your lenders. They may not have an issue with it, since they still hold the lein on the property. Just a thought.
@@ClintCoons
What do you think?
@@pamcovey4759 I would use a series LLC and place each in its own cell. If you are concerned about the lender (not an issue in my experience but you never know) use a land trust for each property then place the beneficial interest in a separate cell.
Clint, if I bought a property in Utah and put in into a corporation in Nevada, then I closed the corporation, took myself off as officers in Nevada and opened the corporation in Wyoming using the same name, do I still own the property? Or do I need to re do the deed paperwork with the new Wyoming corporation even though it carries the same name. I was told the property is in limbo now because the EIN numbers are not the same.
Thanks
Yes this could create a problem if title was able to track the chain of events. In such an event the prudent course of action would be to reorganize the NV corporation into WY thus you would maintain the EIN and the entity status. If you shut it down and deeded the property out you might create a taxable event for yourself.
The commentator is not addressing a serious problem with our monetary system. The Bank "loan" is really a ruse. Simply stated: the banks are taking your signed promissory note and depositing it in a transaction account as if it was a check "an unconditional promise to pay is cash", then they draw a check from that transaction account and "loan" it back to the signer. In a foreclosure the bank gets a free house because they bank introduced no consideration in what I believe to be a unilateral contract because there was no "VALUE RECEIVED". The bank did not specify THE VALUE RECEIVED.
How/where is the $160K in the WY LLC held in this scenario? Do you have to create a business accounting in WY because the LLC is in WY? Also you mentioned privacy through the WY partnership. What are your thoughts on using a company as the registered agent for the local state LLC removing the owners name from public records? Is that a coo work around to avoid the partnership WY LLC?
The cash is held in the LLC's bank account. You do not need to open a bank account in WY you can open it locally for your WY LLC. Yes when we file the LLC we serve as the resident agent for the WY LLC to keep our client's information private.
What if you want to name the LLC after the address of the rental property which is usually a standard? Example 123 Birdview St, LLC.
In this case you are not going to create a LLC on a property you might not be able to close on plus the two months of income will not be possible. Please advise.
Correct or you accept the fact the address will not match the property. Maybe wait until your money has gone hard then set up the LLC before closing.
@@ClintCoons Help me to understand. I transfer the 20-25% downpayment to my personal account and let it sit there for 60 days. I put in an offer for 123 Birdview St which the buyer accepts and then I tell my bank I would like to put it in an LLC? Granted, I don't have the LLC created since I want it to match the street address. The fastest an LLC can be created is in 2-5 business days according to LegalZoom. I can stall the closing processes until 123 Birdview St, LLC. is created?
Correct but an LLC can be set up in WY in a matter of minutes.
I am about to purchase my first home using fha financing and then progress to conventional loans as i grow my portfolio...how do i do that using an llc?
After you acquire the home you will typically transfer it into an LLC. The lender will most likely not allow you taking title in the LLC.
Is the same thing applies during re-finacing?
Depends on the lender. It is advisable to ask your lender in advance of obtaining the financing wether you need to change anything for the loan.
Thank you for the content Clint. How can one form a partnership WY Holding LLC if the person is a single member? Can I form a WY disregarded LLC and make it a member of my holding LLC?
You need to find another partner. This could be a parent, sibling, child, or business entity taxed as a corporation. Remember you only need to give the partner a .5% interest.
@@ClintCoons thank you!
Simply amazing!!!!
Thank you! Cheers!
How do I have you execute an operating agreement for my llc
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
How you doing man? How can I use Llc money to purchase a new dump truck for my dump truck business? To get the ball rolling
Yes you can.
Would you do it the same if using an S-Corp?
Yes
Do you recommend creating LLC for purchasing your first property?
Yes. Here is link to a video on the topic: th-cam.com/video/P7BSvC3JZ9I/w-d-xo.html
I bought my rent houses through my LLC and I’m a sole proprietor. I’m not sure how you got “traditional” loans by “seasoning” personal accounts because my mortgages and insurance won’t allow rentals through that avenue unless I lived in property for over a year first. What did I miss?
I am discussing seasoning money for a new purchase where you are purchasing in your own name i.e. ,a freddie or fannie conforming loan would require you take title in your own name and have seasoned funds for the down.
But what if your first starting, would you do the same thing or ?
This depends on what you are doing. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
can the same process work, if funds are in an trust account
Yes. The trust can hold the deed of trust on the property.
Won't you get hit with taxes upon distribution from an LLC ?
Also, won't your tax bracket slide up a notch if you're a W-2 employee outside of lending?
Distributions have no relation to taxes unless your LLC is set up as a C-corporation. The only time you have income from an LLC is when the LLC has generated income. (Again this does not apply to C-corporations). Yes your income tax bracket will go up the more you make at your W-2 job.
My lender will not let me deed the property into an LLC without the risk of the Due on Sale clause. Should I deed it over anyway or use another form of liability protection? PLEASE HELP
This is a personal decision. Most of my clients do deed their property into a LLC for asset protection and if the lender later notifies them of a concern - they pull the property out.
Real Estate Asset Protection In another video I thought you said you would title the property in a trust, then assign the LLC as beneficiary of the trust? Or something like that? And that using a trust this way is legal and the lender can’t do anything about this, correct?
Sir, I am planning to invest in rental properties with a foreign investor as a partner under an LLC. What is the best way to do it? With 20% down, balance by a mortgage loan.
Sure but set up an LLC to protect the investment or at least your portion of the investment.
Should I form a HOLDING COMPANY to flip property in multiple states? If I form a LLC in Wyoming, do I have to open a BANK ACCOUNT in Wyoming?
You can open your bank account anywhere for your WY LLC but the flipping side of the question - you can but it will depend on how involved you will be in the flip. Sometimes anonymity can work against you making it more difficult to run your active business. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Hey Clint my question is if I create a holding LLC let's say out of Wyoming and I plan to use traditional financing should I create another LLC from the state in which I plan on buying the properties under the holding LLC to finance my properties?
Yes but are you planning to finance the property in the LLC or your own name then transfer to the LLC.?
good question, I’m planning on financing the property through the LLC from the state in which I plan on buying. Is this practical ? Will I achieve anonymity this way ?
@@vvsblk4594 Yes you can finance if you find the right lender. Most brokers will only finance residential in your name then you will deed the property into the LLC
@@ClintCoons if I buy the property in my own name and then deed into the LLC is this voiding anonymity ? And are there other ways to finance real estate using business credit where i personally remain anonymous?
@@vvsblk4594 Deeding it to your LLC does not void your anonymity but you are in the chain of title. If you use a quitclaim deed then this is a concern that will look suspicious so always use a warranty deed.
Is it possible to use VA home loan, to purchase multi family residence, under an LLC?
Yes you can purchase a multifamily provided you live in one of the units and it is not more than 4 units in total. Yes you can transfer the property to an LLC but it does violate the Guaranteed Loan and Assumption Policy Rider you signed when taking out the loan I.e., due on sale clause. Does this imply your loan will be accelerated - probably not but its always a possibility. This is type of clause is standard in most residential mortgages and is rarely enforced. If concurred, I like to use land trusts to hold title.
real estate investor: its a disregarded LLC it doesn't file tax returns
underwriter: never heard of it.
reas estate investor: and thats why you're sitting there.
😂😂😂
Does a holding company still qualify for the 20% pass through tax law for single member llc’s?
Yes
What about paying cash for real-estate under llc with no financing?
Buy it directly in the name of the LLC
Any way to make the holding company a partnership if you're the only member?
Yes. Make a corporation or other entity the additional member.
Quick question! Do you have to pay personal taxes on the 20k when you pull out of your LLC to sit for 2 months?
You do not pay tax on money you put into an LLC and later withdraw. you only pay tax on income generated in the LLC.
Thanks for the question. Just gave me an idea for another video. If you would like a free copy of my book "Asset Protection for Real Estate Investors" email my assistant Deborah Lewis - dlewis@andersonadvisors.com.
@@ClintCoons did this video ever get made?
@@francismialkowski4190 It will hit next Tuesday
Would this not be considered co-mingling assets, and pierce the corporate veil?
No. Co-mingling occurs when you use business assets to pay for personal expenses and you do not have a system in place to track reimbursements etc. Have good books is very important when it comes to a claim of co-mingling assets.
Yes Bingy on a soldier mindset yes or you have a boss you have to act your part on that 48 laws of power shit never outshine your master
Very informative video but I need more help. Does your company provide service to those out of state (PA)? I need to establish my LLC properly so I can acquire more properties the right way and be able to get bank funding to acquire more.
Yes we do. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession