Updated over 4 years ago on . Most recent reply
Opinions on forming an LLC
Hello. I am very new to the process of real estate investing but would love some input from those who have done it before. What is the consensus on setting up an LLC before making investments ? How much harder is it to get financing once this is set up? Any insight would be helpful. Thank you
Mike
Most Popular Reply
Hello,
It depends on your strategy. If you are looking to purchase with private money or hard money they may require it to be in an LLC. However, when you get ready to re-fi may be a problem because many lenders will not lend to an LLC. Of course there are some that will and you will need to search those out. But if you are looking to purchase or re-fi with a traditional fannie may/freddie mac loan it is more difficult to find a lender to purchase in a company name. If you are using a commercial lender or buying multifamily then you for sure want it in a LLC. But I work with a lot of new investors and we have found for them, without experience, it is more difficult to buy a property, "get a mortgage", in an LLC name. However, you can purchase the property in your personal name and then deed it to your LLC. I would seek out some lenders and get pre-qualified for what you are looking to do and get advise from them. However, anytime you are running a business you will want it to be in an LLC. Eventually as you grow you will then want more protection and move to an S Corp, trust, or other options. At that point you will want to speak to an asset protection specialist. Happy investing!