Investment Group Financing in Northeast NJ - Set up an LLC before first purchase?

[Jerome Nunez]

BP, 

I'm partnering w/ two individuals to acquire our first 4-unit property in Northeast NJ. We've been discussing financing options, specifically looking at FHA (less equity but 1-year owner occupancy requirement) and conventional financing.

Is it best practice to set up an LLC if investing as a group? What types of financings have other groups leveraged in NJ? Are there less financing options for LLCs?

[Dominic Pizzi]

Quote from @Jerome Nunez:

BP, 

I'm partnering w/ two individuals to acquire our first 4-unit property in Northeast NJ. We've been discussing financing options, specifically looking at FHA (less equity but 1-year owner occupancy requirement) and conventional financing.

Is it best practice to set up an LLC if investing as a group? What types of financings have other groups leveraged in NJ? Are there less financing options for LLCs?

 Hey Parris!

Lenders do actually allow you to use an LLC to close through their title company. It is beneficial for tax and legality purposes. The only thing is that lenders who do use LLCs will need to verify credit scores for each individual in the LLC if they are all going to be on the loan.

If you have any additional questions, please send me a PM!