Is having a llc necessary when applying for funding? Private money or hard money.
It is usually necessary to have the “borrower” be an Entity in some form or another. This would be more apparent when the property being financed is less than 5 units, which would separate residential real estate from commercial real estate by definition in most cases. So, depending on your situation and the particular lender requirements, you may or may not need to be a LLC.
I’m looking to get funding for residential fix and flips… Do I need an LLC for that?
No. I do all my investing under my name.
If you do the loan under an LLC they will most likely require a personal guarantee.
I have had probably 6-8 hard money loans with the same lender.
The main thing they look at is the house itself and your ability to pay them until you get the house sold.
They will check your numbers on purchase and rehab.
Usually they escrow your rehab funds so you will make draws as the work is complete.
They usually charge a fee for an inspection of the work and to issue the draw.
I usually fund the repairs myself and only have the final draw when everything is complete.
This is a great question. We have established an LLC and are working on acquiring funding for our projects.