Building Credit for Newly Created LLC
Good Morning,
Looking for advice on how to build credit for a newly formed LLC. I currently have 2 condos that I own outright (no loans) under my own name and earn rental income from. Going forward, I want to buy property under the newly formed LLC.
What should I do to start building credit for the newly created LLC? Should I look to transfer ownership of the two condos to the LLC? Can I use the LLC to provide property management to the 2 existing condo? I'm looking for ideas and open to all suggestions.
Thank You.
Most Popular Reply
As mentioned, you need to differentiate the difference between "business credit" and getting a real estate loan. The former is for the entity to get a business loan that is secured by "however that is done" --- I don't do it.. The latter is getting a loan to purchase real estate which is easier since there is real property being put up for collateral and normally you guarantee the loan, which is pretty normal. This is how you purchase a property with a brand new LLC. Just remember that legal entities are NOT eligible for conforming residential loans, so you will need "commercial" financing. The LLC should really be the one giving the mortgage, so doing the purchase under your name and quit claim deeding isn't really advised in my view.