Real Estate Investor · Cincinnati, OH · Member since 2010 · 23 posts · 1 vote
Let me first say that I am a student/fan of Robert Kiyosaki. I own all of the videos/audio books/games he's made. Aparently the "No Money Down" days are over for hard money lenders. I was told the other day that my financial education is outdated, because I was looking for a no money down loan to purchase a very cheaply priced two-family rental from a friend. I'm wishing to start out in REI, but I partied a little too hard in my past and have terrible credit. I've matured alot since graduating college, but my past still haunts me financially. I work as a delivery driver and half of my money is from tips, which dosen't count towards my income. So I have bad credit, no capital, and a bad debt-to-income ratio. Would it be easier for me to just form an LLC and aquire investment properties through that entity? I eventually wanted to hold my future properties in an LLC for asset protection and liability protection anyway.
It confuses me why this question gets asked so often. is some "guru" telling people that they can get easy credit through an LLC?
If they are, they are wrong.
It is much harder to get credit for an LLC even if you have great credit.
Think about it from a lenders standpoint. If you are a bad credit risk personally, why would you suddenly be a good credit risk with an LLC which actually makes it even easier for you to walk away from debt?
An LLC needs to have an established business with revenues and profits on its own to begin to establish credit.
Hi David
I don't have an answer to your question about obtaining funds in and LLC. I do know that it is not as easy to get money these days.
I wonder where you are located. I didn't find info on your profile.
Best of luck...
just updated my profile. I live in Cincinnati, OH.
David:
this is probably not going to be the answer you were looking for but nevertheless here it is. It would be very, very difficult for you to obtain money/loans using an LLC. As a new LLC the banks will often require you to personally guarantee any loan made to the LLC. Of course you would have to be credit worthy in order to be able to make that guarantee. Since as you stated your credit is terrible, you will likely not have much luck getting funding from traditional lenders (banks).
Like I said, probably not the answer you were looking for
It confuses me why this question gets asked so often. is some "guru" telling people that they can get easy credit through an LLC?
If they are, they are wrong.
It is much harder to get credit for an LLC even if you have great credit.
Think about it from a lenders standpoint. If you are a bad credit risk personally, why would you suddenly be a good credit risk with an LLC which actually makes it even easier for you to walk away from debt?
An LLC needs to have an established business with revenues and profits on its own to begin to establish credit.