new investor, mortgage options with LLC

[Marie Plumb]

Hey everyone,

I am a new real estate agent in Michigan and I have been browsing rental property options for a few years now. I am getting to a point where I am ready to take the leap and buy my first investment property. I am looking for multifamily properties. I want to start an LLC for the property I get. I have done some research regarding LLC's and opening a business account. Can anyone share their experiences regarding LLC's and obtaining financing with me. Is it hard to get a mortgage with an LLC that is newly created? Do they look at your personal income since the LLC will not be generating any income at that point. Any information or tips would be appreciated. This all seems so foreign to me. I am a nurse trying to transition to the real estate and investment world.

Thank you!!

Marie

[Doug Smith]

In the investor world, unlike in the traditional commercial lending space, the age of the entity is nearly irrelevant. It's the experience of the operator that seems to be the challenge. We can get new DSCR deals done and even relatively new flippers if it's a lighter flip. Where experience really comes into play is on the ground-up construction or heavy rehab side. Obviously, the more experience you have the better the deal for the investor, but if you're an investor, I would be less concerned with the age of the entity and more concerned with the background and experience of the team.