How to Lend Against an LLC?

[John Anderson]

Hello,

My partner and I formed an LLC recently. We have been paying all-cash for some small duplexes and single family homes thus far, but are looking to qualify for financing for our next batch of homes.

If anyone is able to provide us with any insight as to how best we can accomplish this, we would greatly appreciate it. We are looking to get Fannie Mae loans, but many lenders have informed us that they will require us to take out the home from the LLC first and put it in our individual names.

Should we instead create our own LLCs?

Any and all help would be greatly appreciated.

Thanks!

[Greg Scott]

Having your own LLC won't solve your problem. You still won't be able to get a Fannie Mae loan.  Of course, you could get a bank loan, but the terms won't be as good.

When I was buying single family properties, I moved away from LLCs and instead beefed up my insurance coverage.  With $500K of liability per property and a $2M umbrella, I slept well at night.