Investment house loan in company name

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Investment house loan in company name

Deano VulcanoPro Member
Investor · Fort Mill, SC · Member since 2013 · 128 posts · 70 votes

I`m sure this has been asked a thousands times here but I thought it may be quicker to just ask it straight up.

I`m looking for a lending institution that will do an investment loan under the name of my corporation, any thoughts?

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Stacy RaskinBusiness Member
Lender · Member since 2022 · 1k+ posts · 505 votes
2y

You can get a non agency or a DSCR loan under your LLC name.

Some DSCR lenders will go down to a $75K value and a $50K loan amount. It's the same work to do a $55K loan as a $500K loan so the fees will be higher due to the loan amount but will still be much lower than what a lender or broker gets paid on a higher loan amount.

DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

[email protected]818-770-0340
Bright Skyline518 Reviews
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  • John O'LearyPro Member
    Lender · Winter Park, FL · Member since 2021 · 737 posts · 412 votes
    2y

    Hey Deano,

    Most lenders here on BP lend to LLC, and Corps. What type of asset? Is it a value add project, or are you buying turnkey?

    [email protected]800-663-4122
    0Reply
  • Deano VulcanoPro Member
    OP
    Investor · Fort Mill, SC · Member since 2013 · 128 posts · 70 votes
    2y

    Hi John, 

    Here are the numbers: Purchase Price $101k/ ARV $205k/ Down payment $21k/ No rehab/ 785 credit score/ 30 yr amortization

    0Reply
  • Deano VulcanoPro Member
    OP
    Investor · Fort Mill, SC · Member since 2013 · 128 posts · 70 votes
    2y
    Quote from @Account Closed:
    Quote from @Deano Vulcano:

    I`m sure this has been asked a thousands times here but I thought it may be quicker to just ask it straight up.

    I`m looking for a lending institution that will do an investment loan under the name of my corporation, any thoughts?

    If you do that under your corporation, your corporation may be sued if anything happens regarding the property.


    0Reply
  • Deano VulcanoPro Member
    OP
    Investor · Fort Mill, SC · Member since 2013 · 128 posts · 70 votes
    2y

    Ken, what do you suggest, a separate LLC?

    0Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
    2y
    Quote from @Deano Vulcano:

    I`m sure this has been asked a thousands times here but I thought it may be quicker to just ask it straight up.

    I`m looking for a lending institution that will do an investment loan under the name of my corporation, any thoughts?


     Hi Deano,

    You've come to the right place! You can close under your LLC or any business entity name with a DSCR loan. General requirements would be 20% for a 1-4 unit property, DSCR of at least 1.00x or greater, and you can qualify with a score as low as 620. Of course, the higher the better. As long as you have your down payment, closing costs, reserves, and anticipated rent covers the debt service you should have no problem. Good luck!

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 652 posts · 315 votes
    2y
    Quote from @Deano Vulcano:

    Hi John, 

    Here are the numbers: Purchase Price $101k/ ARV $205k/ Down payment $21k/ No rehab/ 785 credit score/ 30 yr amortization


     Hey Deano,

    You can either Quit Claim Deed it over to your LLC, or you can refinance at the new value, assuming you have owned it long enough for seasoning to take place (usually 6 months, some lenders will do 3 or less) and get some cash out as well.

    Is it tenant occupied already as well? You would need a new appraisal and while some lenders can go off of the market rents on a 1007, you will want to make sure of that before you get in too far.

    Good luck, happy to help where I can. Very straightforward process if you have the tenant in there and want a full cash-out refi.

    [email protected]417-427-2612
    0Reply
  • Givo Aghasi
    Lender · Los Angeles, CA · Member since 2022 · 238 posts · 73 votes
    2y

    @Deano Vulcano You can use a DSCR loan and go up to 80% LTV. Some lenders allow for 90% CLTV. You can close in any entity or individual name in some states. I suggest looking into an option with low or no prepayment penalty so you can refinance using the ARV.

    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Yes definitely . No income no doc and in LLC . Bridge, fix and flip, ground up construction and DSCR . What is your scenario looking like ?

    0Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 505 votes
    2y

    You can get a non agency or a DSCR loan under your LLC name.

    Some DSCR lenders will go down to a $75K value and a $50K loan amount. It's the same work to do a $55K loan as a $500K loan so the fees will be higher due to the loan amount but will still be much lower than what a lender or broker gets paid on a higher loan amount.

    DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
    WebsiteView Page
    1Reply
  • Tony Savage
    Real Estate Broker · San Diego, CA · Member since 2016 · 187 posts · 117 votes
    2y

    Hi Deano,

    Put the asset in an LLC, not your c-corp. I use my c-corp for flipping so I wont get tagged with dealer status. If your buying a rental, LLC's are best.

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Deano Vulcano:

    I`m sure this has been asked a thousands times here but I thought it may be quicker to just ask it straight up.

    I`m looking for a lending institution that will do an investment loan under the name of my corporation, any thoughts?


    Yes you may close in an LLC with most DSCR, Hard Money, or Commercial Lenders

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Scott WolfPro Member
    Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 957 votes
    2y
    Quote from @Deano Vulcano:

    Hi John, 

    Here are the numbers: Purchase Price $101k/ ARV $205k/ Down payment $21k/ No rehab/ 785 credit score/ 30 yr amortization

    This may have already been mentioned, but how is the ARV over 100% higher than the purchase price with no rehab?  Are you just not borrowing the rehab portion?
    0Reply
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