Rental Property Financing: Conventional or commercial mortgage??

4 Replies

I am in the early stages of starting my Real Estate rental business, JJ&P Real Estate Solutions, and I am trying to decide if it possible to get my first property, a four-plex, using my personal info or do I have to use a commercial loan via my business. It is just easier for me, especially as an active duty soldier, to get a conventional loan using my SSN than trying to get a commercial loan through my new startup business. So is it even an option for me to buy a property in my name for my business??

Please help!

In my opinion it is much smarter to get your first loans personally.  

You need less down, 95% of lenders can accommodate you.  

After you have 10 mortgages look for a commercial lender.  You can see if the lender will do a loan to your trust if you don't want it in your personal name.  Conventional lenders will not loan to businesses.  

After you own 10+ rental properties, look at commercial lenders.  They will loan to your business.  The rules and language is completely different.  Typically commercial loans are more expensive, more down, more experience required, shorter terms (5 to 10 year balloon) but maybe more flexible.  

@Paula Pitter  To build on what @Steve L.  has said, you can also use a conventional mortgage for anything up to and including a 4-plex. For 5+family properties you must go commercial.

you know, if you live in one of the units you can go VA, which means 0% down. but otherwise yeah, stick with personal until you get too big :)

Thanks for the response guys, I really appreciate it. I thought personal loan was the best way to go but i just wasnt sure if it was possible. I think i'll just buy personal and manage through my business entity.

Thanks again

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