Hi Lee Phillips here again
I want to talk to you about credit in your LLC
and there are gurus going around that charge you $5,000 to get your LLC credit
you might as well just flush your $4,000 or $5,000 down the toilet
because it isn't going to work
it doesn't help you at all
in fact there are a number of things that you don't understand about credit and an LLC
One, you're always going to sign personally
now I have another YouTube video on that
Two, when you put a property into an LLC
and the Guru's run around and tell you
put each one of your pieces of rental real estate into a separate LLC
it's okay for asset protection purposes
there's a big argument as to whether or not use a separate one for each LLC
and I have a YouTube video on that as well
but when you put a piece of property into an LLC that is no longer your property
you cannot use it as collateral when you get a loan
and what you will find is
your LLC cannot get a loan either
your LLC has no credit
even if you "build up credit"
they are always going to make you sign personally
I have another YouTube on that too I know you're surprised
but you're stuck
and in fact you're actually losing credit in your LLC
and what the Gurus do is they go in
and they establish accounts with Home Depot and stuff
and you get good credit
and Home Depot says
oh your little XYZ LLC it has perfect credit
and you say well I want a credit card now, too
and they say fine no problem
we will give you a Home Depot, OfficeMax, whatever it is credit-card
sign here personally
you sign personally on that credit card
you will do that every time
you're not going to be able to get around it
the real problem is, is that you've moved all of these assets
into different entities
these all of your five rental units
they're not yours anymore
you can't use them when you apply for credit
because they're not yours
they belong to LLC's
and an LLC by law
is not you
it's a different entity
and you're gonna have to have a tax return for each one of them
and that's gonna feed into your personal application
for a mortgage
and the mortgage company sits and scratches his head
and you can't get a mortgage
I used to always pay more for my mortgages because I would state
I would say that I want a stated income mortgage
because I've got so many LLC's and stuff
I now can't get a mortgage
even though I have lots of wealth
it's all divided up and all over the place and asset protected
and the mortgage companies can't figure it out
and they won't let me use it as collateral
and I'm trying to get a mortgage at the moment
and it's not working
I've been rejected twice
even though I have a basically perfect credit history
so
there's a downside to the credit in an LLC
and that is there isn't any such thing
but there's a downside to
doing the asset protection, and doing the tax planning
because you're not a normal person anymore
and the mortgage companies can't figure that out
to be very honest with you
this actually comes from a question that I had
if you have a question, fine, email me
INFO@LEGALEES.COM
and I'll try and answer your question
I get in dozens of them a day
and we answer them
we answer every one of them
so anyway that's something that I offer to people
who are my students, I call you
and the YouTube people are not totally students but
credit is a big deal
and you're just not gonna get it
don't forget to subscribe to the YouTube so that we can figure out
what to get you and
so you can see when we put up something new
because we do a lot of these
and we do them on asset protection and taxes and
and estate planning and business structures and all sorts of things
so don't forget to subscribe and do send me your question
on an email: info@legalees.com
we're talking about credit in your LLC
or maybe I should say the myth of credit in your LLC