Updated 2 days ago on . Most recent reply
Using LLC for financing
Hello, I'm still researching and planing my first purchase so I'm really inexperienced.
I'm reading a lot about how it's important to form an LLC for each property to help better protect assets and limit liability.
However it's sounds like a catch 22 as most lenders won't offer financing for a new LLC since the credit it so new for the business.
What would be the best possible direction to take to receive financing for a duplex/multifamily property for house hacking while still operating it under an LLC?
Most Popular Reply
I think an LLC makes sense if you have sizable personal assets. The LLC provides only liability protection... otherwise, it's just a pain. I've set my properties under LLC's due to having sizable personal assets.
also, I personally limit each LLC to about $1mil of real estate value. on the financing side, getting a mortgage will be less expensive if under your name. LLC's will need commercial or DSCR loans, which tend to have higher fees and pricing than conforming mortgages.
end of the day, if you don't have a substantial net worth right now, I'd say buy under your own name and get an umbrella policy.