Borrowing as LLC

Does anyone have any experience getting lenders to loan money to an LLC instead of having things in your name, or do traditional mortgage lenders need an actual person to be responsible? What about HMLs?

I have used many of the LLC i created to purchase RE. You have to build credit though under this entity. There may be better or faster ways but i signed up for CC’s and really managed those accounts. When you create the LLC have your attorney file for you.

The best scenario for investment, development, and commercial property in Texas is:

a) The property is owned by a limited partnership (LP), with a limited liability company (LLC) as general partner. This structure minimizes state franchise taxes, which can be significant. If franchise taxes will be minimal, the property could be owned by the LLC.

b) The lender will make a loan to the LP or LLC, and the LP or LLC will execute the real estate lien note.

c) The lender will have a first lien deed of trust (mortgage) on the property.

d) The lender will require the limited partners and / or managers and members of the LLC to personally guarantee the loan.

Even with the personal guarantees, you should still use the LP / LLC approach because of the liability protection and tax advantages.

Unless you have tremendous development or management experience, or a tremendous amount of equity in multiple properties, the lender will require the personal guarantees.

Best regards.

Steve Tiemann

I can’t find any bank that will give a residential type loan to an LLC, even though I have a credit score higher than 800 and am willing to personally guarantee the note. Comercial loans are no problem, most any lender will give me one of those. However, commercial loans inevitably have shorter amortization periods and other unfavorable terms that tend to turn most rental real estate upside down in cash flow.

Would love to know any lenders willing to provide residential loans to an LLC.

As a general rule. No lender will loan to an LLC… They have no recorse if it goes into defalt… Thank you, Michael