DSCR Lenders lending to a LLC

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Alex BekezaBusiness Member
Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
2y

@John Jacobs Yes, your typical DSCR loan on a 1-4 unit property will be "full recourse". They'll allow LLC vesting and the use of LLC as borrower but will still require a guarantee from a warm body guarantor who owns at least 20% of the entity and use that persons credit score (mid FICO) to determine pricing and qualification. However, these loans typically do NOT report to your personal credit even when you're the guarantor.

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  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    2y

    @John Jacobs Yes, your typical DSCR loan on a 1-4 unit property will be "full recourse". They'll allow LLC vesting and the use of LLC as borrower but will still require a guarantee from a warm body guarantor who owns at least 20% of the entity and use that persons credit score (mid FICO) to determine pricing and qualification. However, these loans typically do NOT report to your personal credit even when you're the guarantor.

    [email protected]818-606-8823
    Investor Property Loan5307 Reviews
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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    2y

    @John Jacobs

    Someone will need to give a personal guarantee.(At least one LLC member) This will come with a credit pull as well. We have helped many investors in the Indy market, I would be happy to take a call if you would like someone to explain how these loans work in more detail.

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
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  • Adam WindhamPro Member
    Lender · San Diego | Phoenix | Miami · Member since 2019 · 39 posts · 65 votes
    2y

    @John Jacobs yes most DSCR Lenders require at least one member of the LLC to be the personal guarantor. However you can structure them if you have Limited Partners (LPs) that just provide capital so that those LPs do not need to have their credit pulled or sign a personal guarantee.

    [email protected]619-304-9507
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  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    2y

    Yes...pretty much without exception

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @John Jacobs:

    Do DSCR Lenders lending to a LLC typically require a Personal Guarantee from the Member(s) of the LLC?


    Yes, most DSCR lenders will require a personal guarantee. There are a few that are non-recourse up to 1.5 mil.

    [email protected]818-269-7983
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