You are here:

Foreclosure/Creating an LLC for a rental property


Hello, my wife and sister own a condo that they are now renting because they have very little equity in the property and can't afford to sell it. They are having a lot of issues with finding tenants and getting rent from tenants forcing us to have to come up with the money for the mortgage. We are being stretched very thin because of this and can't afford to do it much longer. The property is in my wife's name only and we are concerned that if she defaults on the loan the mortgage company will start coming after our assets. We were told that if we create an LLC the mortgage company could only go after the business and worst case scenario would be that the business would go under. Is this true? Any information would help. Thank you in advance.

Hey Mike,

If you purchased the property in the beginning in the business name then that would be true. Your wife personally guaranteed the loan so even if you change it into an LLC, your wife is still responsible. if you default on the mortgage, you can short sell the property and have the bank pay the fees so that she can walk away and be done. When you do this you get it in writing that they will forgive the debt. Also banks can't come after your assets unless the property is already foreclosed. Most of the time they however don't come after you. You really need to talk to a Real Estate agent that is in your area that specializes in short sales. They will give you all of your options not just the short sale option. I know realtors all over the company so if you would like me to line one up for you send me an email to Hope that I was able to help.



All Answers

Answers by Expert:

Ask Experts


Brian Pitcher


I can answer all questions in regards to short sales, strategic default, foreclosures, loan modifications, and most questions regarding real estate law.


I have closed well over 100 short sales in the past 3 years and that is the work we primarily do. We teach people how to keep their home if they can or how to bail on it in the best possible way without any recourse. I have taught many public seminars to accountants, loan mod counselors, attorney's and also many other real estate agents all over the country. I also know how to deal with the very tough second mortgages in the negotiations as well as mechanic liens and default judgements.

I have a bachelors in Spanish with a minor in Economics from the University of Utah. I have also been a Realtor for 8 years closing well over 200 transactions. I am a KW instructor for Short Sales and Foreclosures.

©2016 All rights reserved.