can you finance real estate through LLC?

Financing, Hard Money Lenders, Private Money
1

Newbie investor here and I need Help! Is it possible to finance real estate through an LLC? If possible, can someone please help me find some info on how to do this and where to go to get this done? Any information on this topic is greatly appreciated!

2

Yes you can IF…

  1. Your LLC is two years old or older

  2. you LLC has a credit history

  3. You do not mind doing all your deals with commercial lending and paying their rates and their lending LTV requirements ( usually higher rates and Lower LTV with commercial deal)

  4. You have filed LLC or corporate TAX RETURNS ( you can go stated with commercial lending and you will pay much higher rates than if you went stated with a residential loan with a personal guarantee.

Why not just use residential lending you can get higher LTV and better rates then put the home in a LLC later for asset protection

3

Thanks alot! I appreciate it. So do you mean later as in a day after closing? or can you deed it over to the LLC at closing? Thanks again for your help.

4

My suggestion would be to put it in a land trust and make the LLC the beneficary.

That way you avoid the due on sale clause and in some states a tax able event.

others it does not matter it will be a taxable event even if you put it in a LLC or a Land trust. so you will need to contact an attorney in your state.

5

Hello!
I was advised by my attorney to transfer out of the LLC to get a loan and then place it back in the LLC afterwards. Or really to wait and get the loan before putting the property into an LLC. He said no bank will loan money to an LLC. (I guess the exceptions listed above in an earlier post are the exceptions.)
Ray

6

I was advised by my attorney to transfer out of the LLC to get a loan and then place it back in the LLC afterwards. Or really to wait and get the loan before putting the property into an LLC. He said no bank will loan money to an LLC. (I guess the exceptions listed above in an earlier post are the exceptions.)
Ray

Yes, your attorney is correct. You can NOT get a residential bank loan in a LLC and you can get a COMMERCIAL LOAN in a LLC and you will pay for it with commercial type of lending requirements and rates(as you read above)

Yes, that is right you can to put it in an LLC after you close and my recommendation would be to put it in a Land Trust and make the LLC the beneficiary. That way you avoid the Due on Sale clause that is triggered by putting it in an LLC which is NOT when it is put in a Land trust or any trust for that matter.

Hope this helps

Laura