Professional · Morganville, NJ · Member since 2016 · 11 posts · 4 votes
hello,
I am looking to invest in a multi unit property. 6 residential units and one commercial unit (one building).
What is the best approach to fund and structure this investment? We can pay cash, obviously will get a loan for better returns. Should an LLC be formed and then obtain a loan through the LLC to make the purchase? We intend on putting 60% cash. So 40% loan.
Seller pushing for a very quick closing. Provided we can't get our ducks lined up on 45 days (LLC formation, Loan etc,) we can just pay cash and later on figure out how to transition to an LLC structure.
Is this the typical way commercial real estate deals are completed, through an LLC? (generally speaking).
I am looking to invest in a multi unit property. 6 residential units and one commercial unit (one building).
What is the best approach to fund and structure this investment? We can pay cash, obviously will get a loan for better returns. Should an LLC be formed and then obtain a loan through the LLC to make the purchase? We intend on putting 60% cash. So 40% loan.
Seller pushing for a very quick closing. Provided we can't get our ducks lined up on 45 days (LLC formation, Loan etc,) we can just pay cash and later on figure out how to transition to an LLC structure.
Is this the typical way commercial real estate deals are completed, through an LLC? (generally speaking).
You can't get specific answers without knowing more information. Generally, a corporate entity will be appropriate in this situation. You should close with cash in the LLC name and refinance later. I recommend @Jessica Zolotorofe she is in NJ and can help.
Your structure will depend on who's bringing the equity and what role everyone will be taking. I would suggest you get your debt figured out, as you don't want to get stuck with any financing hiccups and having all of your cash tied up for a lengthy period of time.
There's no typical way in real estate transactions as each is unique in it's own way. While LLC may work potentially for your purchase, this should be discussed with your real estate attorney.
As others have said: call your attorney. Every situation is different, and the variables are immense. For example, It may be easier for you and your partner(s) to find lenders as individuals and pay into the eventual LLC as equity on the cap table versus filing a brand new LLC and attempting to find commercial credit. Maybe not. Again, it depends on your exact, specific, detailed situation; a good business attorney can help you with this process more than any of us can, especially given limited details.
I am looking to invest in a multi unit property. 6 residential units and one commercial unit (one building).
What is the best approach to fund and structure this investment? We can pay cash, obviously will get a loan for better returns. Should an LLC be formed and then obtain a loan through the LLC to make the purchase? We intend on putting 60% cash. So 40% loan.
Seller pushing for a very quick closing. Provided we can't get our ducks lined up on 45 days (LLC formation, Loan etc,) we can just pay cash and later on figure out how to transition to an LLC structure.
Is this the typical way commercial real estate deals are completed, through an LLC? (generally speaking).
You can't get specific answers without knowing more information. Generally, a corporate entity will be appropriate in this situation. You should close with cash in the LLC name and refinance later. I recommend @Jessica Zolotorofe she is in NJ and can help.