I have completed one flip and am now looking to purchase a rental property in the Lancaster, PA area. This would be an out-of-state property.
I am prepared to make a 20% down payment but am a little bit confused about the process for pre-approval since I would like to attach the property to an LLC instead of to my own personal name. Funds are readily available for this.
Is there an easy boilerplate way of doing this that 'just works'. E.g. 1) Form LLC 2) Find credit union that lends to investors 3) Supply proof of funds, etc. 4) Receive pre-approval?
Would love to hear from others who have more experience in this than myself!
I don't have any experience with this directly as far as forming an LLC, however we have bought a few investment properties using leverage under our name(s). Although you'll get different answers from different people - I'd advise to consider not using an LLC. If you have good insurance, the LLC doesn't really do much extra for you. Of course many lawyers would tell you otherwise.
Of course, one possible advantage (if this is important to you) is that an LLC provides a layer of obfuscation if for some reason you are looking to make it harder for someone to find out you are a landlord through public records. They'd have to search in two places and probably would have to know what they're looking for.
For most people, this doesn't matter. However I don't see your last name on BP here so it may for you.
@Jim Goebel great advice re: just using your own name. I have worked with people who have attached each property they have invested in to a separate LLC. Again, not entirely sure the reasons but I’m wondering if it is worth it for that additional layer of obfuscation, as you say.
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