Starting off real estate investing with formal LLC

1 Reply

I am going to obtain my first investment property and do not know how to go about the LLC. I've read a lot of online mixed reviews, some people say it's a waste of time unless you have more assets to protect and others say to do it from the very beginning to protect yourself. My question is can someone get mortgage financing for a brand new LLC? If I were to create a brand new LLC, how likely is it a bank will lend To me? Or do you recommend getting the mortgage under my personal name and changing title to LLC after, but I hear his can call your mortgages "due on sale" clause which I am afraid of . Any guidance on this would be great, maybe if you can explain what you did for your first investment property?

Having a mortgage under an LLC requires an LLC to have enough assets and income. If it's a brand new LLC and you want it to be on the mortgage, banks will require you to be a personal guarantee for the mortgage, meaning they will be looking at your DTI, tax returns, etc. Basically the same thing as getting the mortgage in your name.

If you want to protect yourself without going through a headache of making an LLC, get an umbrella insurance policy and pick the coverage that you want. Most investors go this route instead of forming an LLC.

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