does mortgages took out in an LLC effect personal credit

Financing, Hard Money Lenders, Private Money
1

Hello REI club

hey guys, I have a question, I planed on buying a couple of homes traditionally, and I know its wise to purchase real estate in a business name in stead of your own, I was wondering does the loans took out in the name of your business effect your personal credit score.

Thanks,

2

All of our investment properties are owned by our business with my wife and I being equal partners in the management of the LLC. We have to sign personal guarantees on each of our investment property mortgages showing we are personally liable for the business expenses if the business cannot pay. What shows up on the personal side of our credit report is that we are guarantors of those loans. Our personal FICO score doesn’t take a hit because of this extra debt per se, but having the business debt did cause mortgage underwriters to have a problem when we refinanced our personal home.
One of our bankers told us he would be happy to explain the situation to a potential creditor if something ever came up due to us having the investment properties.

3

Makes sense,

thanks for your response

4

We have more than a dozen of these at the moment. In all cases, these are portfolio loans originated and serviced by small community banks. These do not show up anywhere on our personal credit report. Just as @justin0419 mentioned, we do sign personal guarantees for these notes.