How can I get a loan under my LLC?

Question

Hello, I am pre-approved to buy an investment property and I was wondering how can I get this new loan under my LLC? Thanks!!

Robin Simon · Answer

You are probably a ideal candidate for a DSCR Loan - one of the main advantages of DSCR vs. conventional is ability to borrow through a LLC.

Here is a helpful list of articles on BiggerPockets all about DSCR Loans!

DSCR Loans: What Are They And How To Get The Best Terms

https://www.biggerpockets.com/...DSCR Loans: How To Use Pro Strategies To Save More And Make More

https://www.biggerpockets.com/...Multifamily DSCR Loans: A New High-Impact Loan Option For Real Estate Investors?

https://www.biggerpockets.com/...12 Frequently Asked Questions (And Answers) About DSCR Loans

https://www.biggerpockets.com/...

8 More Commonly Asked Questions and Answers to DSCR Loanshttps://www.biggerpockets.com/...

Karl McGarvey · Answer

Lender will have to approve it. LLC is going to drive the need to do commercial financing potentially which is not easier. One reason why  I prefer umbrella policies as opposed to LLCs

Bobby Feinman · Answer

@Brisa Del Cojo

Happy 4th! We only make loans to an entity such as an LLC. So...that is not an issue. What type of loan are you looking for? Short term Fix & Flip/Rent or long term rental loan?

Bobby

Devin Peterson · Answer

The lender or broker who pre approved you should be able to collect info pertinent to closing under the business within the document collection process

1. LLC Formation Entity Docs

2. EIN Number

3. Articles or Organization

the lender will pass this onto underwriting and to title to make sure they close under the business name and not your personal consumer credit report - good luck

Brittany Minocchi · Answer

Like a couple of others have mentioned, a DSCR loan would be an option. This loan is for investments only (not owner-occupied properties) and it uses the property for qualification purposes instead of employment, income, and debt-to-income ratios like traditional financing. The lender will want to see that the property's income meets or exceeds the principal, interest, taxes, insurance and association fees (if applicable). Rates are usually a bit higher than traditional loans, but they've been pretty neck-and-neck recently. Fees are a bit higher, and you'll want to expect a prepayment penalty and at least 20% down to be required.

Happy to answer any other questions you might have - feel free to connect. Happy 4th!

Erik Estrada · Answer

Hey Brisa,

You can close under an LLC with a DSCR loan. Rates are fairly similar to a conventional loan and does not require that you qualify with your personal income.

David M. · Answer

@Brisa Del Cojo

Guesing what you are trying to do...  pretty much you can't..

Legal entities, such as LLC's, are not eligible for conforming residential loans.  These loans are for people who will be living in the home.  The government tries to subsidize home ownership, not property investors.

if you want your LLC to get a loan, you have to basically go after commercial lending.  This is one of the many advantages of investing with your personal name.  Lots of investors on BP do it... plenty of threads onit. its really not that bad.

Some to many residential lenders will say you should just move Title back and forth (but the mortgage will still be under your name).  Jut be careful about potentially making the LLC look like your alter-ego.

Good luck.

Darnell Lockett · Answer

Hi @Brisa Del Cojo. Tell your lender you want to close in a LLC using one of their DSCR business purpose loans. They are very simple and fast to close. We originate DSCR loans all the time for our investors.

How can I get a loan under my LLC?

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