How to get approved for a mortgage as an LLC with no income?

Question

Here me out here. I am officially jumping in and purchasing a rental property but deciding to run as a Sole proprietor or LLC. The only issue is as an LLC, I must keep my personal finances separate from the business’. How would I go about getting approved for a mortgage with this? Currently I am confident in my own personal ability to qualify but would have nothing for the bank to underwrite. Would I need hard money here? Any help would be great!!!

Wayne Brooks · Answer

The bank will be requiring a personal guarantee from you.

Victoria S. · Answer

Hey Chris! How are you?

Might you have sone contacts - I am looking for a property manager in Oakland? Preferably a mom and pop local type. Not a heavy technology type. A person, etc.

How the hell are things there?

Victoria S. · Answer

@Chris Mason what do you mean by "its not 2019 anymore?"

Chris Seveney · Answer

Back to my question of why are you putting this in an LLC? What is the intent?
LLC is for asset protection which you can keep it in your name with an umbrella insurance policy and get same results. You need to review with your attorney and discuss if this is right thing for you. Too many people jump through hoops and spend thousands on LLC’s to buy property and they do not even own a primary residence home or have assets.

Chris Mason · Answer

Hi Victoria. :)

There's always hard money and Fannie Mae money.

For the last couple years, Wall Street has been dabbling in mortgages, creating a bridge to gap what's in between them in terms of risk, rates, fees, etc. You could call that bridge "subprime 2.0," or you could call it "non-qm," it means the same thing. It's the "Rates as low as 6.99%! Fix-n-flip with 10% down" ads you see.

Whelp, Wall Street pulled out the moment COVID-19 hit.

Dan L. · Answer

@Chris Seveney There are other reasons people use LLC's, such as an LLC in a trust or a 401k.

Chris Mason · Answer

It's not 2019 any more.

Dan L. · Answer

Thanks @Chris Seveney. I don't have a problem with co-signing on a loan in the LLC. I just can't find a bank/lender that will do it - even for equity loans on properties fully paid off, but in an LLC. If you know of any, inbox me! :)

Chris Seveney · Answer

@Dan L.

Every bank is going to have you sign a personal guaranty which means if the LLC fails they go after you and your other assets including your LLC’s

Secondly if you mix and match personal with your LLC then having an LLC is pointless as it will get pierced like an ear.

Speak to your attorney on if you should go this route.

Dan L. · Answer

@Wayne Brooks Any suggestions how to find a bank/lender who will do that? I would love to find a lender who would let me personally co-sign on a loan when the assets are in an LLC. I have also wanted to separate my personal finances from the LLC. It is not easy! I have been taking loans in my name, and moving the money into the LLC. But there is only so many uncollateralized loans you can get. All my equity is in the LLC now, which banks won't give me a HELOC on.

How to get approved for a mortgage as an LLC with no income?

How to get approved for a mortgage as an LLC with no income?

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