Commercial Loans to LLC
As a few of you know, I'm working on getting my rental operation off the ground. I have an idea I want to bounce off you regarding loans for rental properties.
I will be forming at least one LLC to run this operation through. More on that later. Here is my idea on getting loans for the properties.
1. Purchase this property with a private loan.
2. Finance the repairs myself.
3. Get a renter in and have cash flowing.
4. Then go apply for a commercial loan through the LLC.
I *think* the banks will be more inclined to loan money on a property that is already flowing cash. Would you agree? My goal is to establish a relationship with multiple banks and lenders that way I have some options when it comes down to it. If all the numbers work, I don't see why I should have too much of an issue getting it done. But I could be mistaken...obviously this will depend on the bank as well.
I'm sure I will still need to put 20% down. Would it be possible to use the equity from the repairs to cover this? I would basically be doing a refinance as I will already own the property. I'm not sure how much this will change the game.
I've met with an attorney and accountant already. Banks and lenders are next on the list.
What do you guys think? Does this sound feasible or am I missing something?
Thanks for all the help.