is LLC worth it?

[BSH]

Hello everybody. I'm writing because I'm not sure my LLC is worth the hassle. We have been doing real estate investing for about 7 years now but formed our LLC 2-1/2 years ago. It is almost impossible to do business under that LLC. First, if I buy a property and title it to the LLC, it significantly narrows the playing field of lenders and makes the mortgage very expensive.

Secondly, if a vehicle or, say our 7x14 enclosed cargo trailer, needs to be insured and they're titled in the LLC, forget it. It's crazy expensive.

If I write a check off my business checking account and the guy goes to my bank to cash it, they charge him $5 if he doesn't bank there. If I were to have given him a personal check, they wouldn't charge him. Yes, $5 is no big deal to most, but I think it's crazy; but it's what all the banks do.

Most of our properties are in our personal names. One that is in our LLC I want to finance, and nowadays it's nearly impossible to do so without being completely gouged by fees and interest rates.

Remind me, why did I get an LLC in the first place? I'm still filing our taxes as jointly married and whatnot. It's just my husband and me, and we have no interest in ever getting so big as to need employees. If the LLC is mostly a liability protection thing, I might just work things out to become self-insured. I just doing think the LLC is worth it. Any thoughts on ditching it and just being me myself and I?

[BSH]

I enjoyed some of the comments in the 10-11-2007 thread entitled, "Borrowing versus transferring to an LLC after closing" in this forum. Basically, I don't think our personal liability is being protected just because we conduct some of our business with the LLC. even after over two years, we still do not conduct 100% (or even 75%) of our business in the LLC. If ever a liability issue arose, I am absolutely certain a judge would 'pierce our coporate veil' and go after us individually.

My lender (who is also a good friend) recommends we up our umbrella policy to a $2M coverage and convert all of our personal properties into trusts, leaving investment properties titled in our individual names if we like. She said she can lend to trusts, but not LLCs (she's w/GMAC and always has great deals for us).

Any comments on this?

[BSH]

Tim, thanks for your advice. The lenders I've spoken with hate lending to an LLC. Or if they do, they'll charge me through the nose. I never need more than 70% LTV, so it's not like I'm asking for anything ridiculous here. But I refuse to pay points or PMI or any other 'junk' fees like that. I have premo credit and shouldn't have to pay all that crap. But my LLC has very little credit (not 'bad,' just not much of anything to show for--I'm working on that though). So lenders want to charge me up the wazoo, citing that we're a big risk or something. It's nuts. It's just my husband and me. We're the LLC, and we own the property as such. We'll even back the note personally if we must; although I want to get away from that.

I'll press for this next time, making them do it the way you suggested. Thanks.