Mortgage advice for an investment property owned by an LLC

10 Replies

My first investment property was under my name and so was the mortgage. Everything was easy.

I put my second property under my LLC, with three other partners. We are almost done with renovations and now we are looking for refinancing options but I haven't had much luck.

Where should I be looking? What kind of loan do I need to search for? What kind of lenders do I need to contact?

I would appreciate any information that could help me find a good rate.

Thank you all in advance.

Marsha,

If your first investment property was under your name, did you get a conventional 30-year fixed rate mortgage? Or did you get a 5-year fixed rate with a 25-year amortization?  This will help me answer your question. 

@Terri Wyzkoski and @Marsha Rost

DSCR lending would work for those type properties. 30 year fixed is readily available and rates are in the 4's with a couple of points depending on the loan size. You can close either in an LLC or your personal name. With Fannie/Freddie tightening their portfolio percentages, DSCR or asset based lending has exploded.

Lots of brokers here on BP

Stephanie

@Stephanie P.   I see what you're saying if she's financing on a conventional basis.  But if she's financing with a commercial loan, she can actually get a 5-year fixed rate right now in the mid-3% range with a 25-year amortization with appropriate income to service the debt, and if personal credit, liquidity, and net worth are strong.  Yes, I've seen lot of brokers.  I enjoy the collaboration.

Originally posted by @Terri Wyzkoski :

@Stephanie P.  I see what you're saying if she's financing on a conventional basis.  But if she's financing with a commercial loan, she can actually get a 5-year fixed rate right now in the mid-3% range with a 25-year amortization with appropriate income to service the debt, and if personal credit, liquidity, and net worth are strong.  Yes, I've seen lot of brokers.  I enjoy the collaboration.

Conventional rates are close to DSCR rates right now; not conventional. No income verification, commercial, 30 year fixed with a loan amount as low as $75,000. Would love to get together with you to see if we can work with your turn downs under 1M.

 

Originally posted by @Marsha Rost :

@Stephanie P.

What's DSCRS?

Debt Service Coverage Ratio. It's the ratio between the mortgage payment and the rents. If the rent covers 100% of the mortgage, the DSCR is 1.0. If a mortgage payment is $1000 per month and the rent is $1200, then the DSCR is considered 1.2 1.2 is considered a decent DSCR for most lenders in this space.