203k Loan with LLC?

[Chris Jordon]

Hey Bigger Pockets:

I'm considering forming an LLC to protect my business partner and I as we inch closer to beginning our REI journey. We are looking to start with purchasing buy and hold property and hopefully using a 203k loan to finance repair cost for the first property or two. The question I have is, by us forming an LLC will that exclude us from some of the lower interest rate loans such as FHA: 203k and Home Path?

[Andy Collins]

You can go two different ways, if you want conforming mortgages, then put them in your personal name,,if you want to put them in an LLC, then use higher priced commercial loans.

If you want to get the mortgage in your name, then put in an LLC,,thats fine, but the LLC will no longer give you the protection you think you have,,the financing is in your personal name,,,you on the hook.

If your managing the property, involved in the rehab, or personally guarantee the financing, the LLC is no little to no value,,just get a large liability policy,,,,