I am new to the sight and have a group I am starting. We have 7 investors with limited capital looking to purchase our first foreclosure. Our challenage has been getting a loan to an LLC. How do we get amortgage for the home so that it is equaly split between all 7 investors and in the LLCs name?
So far I have found we can only have 4 investors on the loan, and they will not loan in the LLCs name. We can transfer after the sale, but my main concern is the risk and tax consequences of the mortgage itself.
I want to reassure my team this will be done correctly.
Can anyone personally guarantee the loan to the LLC? Our bank loans to our LLC, but we have to personally guarantee all the loans. If one of you can do this, the loan will be in the LLC’s name and then the investors’ interest in the property would be according to the LLC’s Operating Agreement.
Banks will require personal guarantees from members of the LLC, according to their percentage of ownership (Some banks won’t require guarantee if ownership is less than 10%). Each banks guidelines are different so you need to ask around or get a good referral–building relationships with bankers is key. Sometimes it is difficult to take title to a property in an LLC’s name if the LLC is relatively new, especially with a national bank. Look for good local banks.
Also, Hard money lenders usually never have a problem allowing you to take title in company name.
You may want to consider working with a hard money lender. A hard money lender is going to care more about the value in the prpoerty than who signs. I know lots of hard money lenders that will loan to an LLC as long as there is a personal gurantee. I dont think you will have an trouble getting this done. I would check in with the hard money lenders posted on this site.