Hard money loans without a LLC

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Hard money loans without a LLC

Allen McGlashing
Investor · Cambridge, MA · Member since 2017 · 195 posts · 106 votes

Hello everyone, i plan on using the BRRRR method on my next deal. I have reached out to many hard money lenders and all require me to create a LLC for them to loan on the property. I was wondering if there are any hard money lenders out there that loan in personal names. I feel that if the property is in my personal name it will be a lot easier to refinance into a long term rental loan.

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    5y

    @Allen McGlashing The property being in an LLC will not change the refi process. Conventional rates are very similar to private loans now days. I think it makes more sense to stick on the private side even for the 30 year refi. Why jump through the banks hoops to get the same product?

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  • Allen McGlashing
    OP
    Investor · Cambridge, MA · Member since 2017 · 195 posts · 106 votes
    5y

    @Matthew Crivelli i understand. I guess I’m just looking at the different options, I want different exit strategies just in case. 

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  • Eric Feldman
    Lender · Dallas, TX · Member since 2016 · 78 posts · 44 votes
    5y

    Allen,

    You are correct that to refi conventionally it would be much easier and advantageous for you to close the loan in your own personal name.  There are hard money lenders out there that will allow you to close individually.  I am not as familiar with the options in Massachusetts, but know of several in my home state of Texas.

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  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    5y

    It depends on the lender and location. We don't require it in my market but other markets need it for sure to protect the intention of the loan.

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  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    HML have to make you put the property into an LLC because of the legal regulations of lending (residential vs commercial). Apart from a personal loan from someone you know, there are no opportunities for lenders to offer you this type of financing without the LLC designation.

    You can change the LLC into a personal name after you exit the HML and try for conventional financing.

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  • Nick BelskyBusiness Member
    Residential and Commercial Broker · Member since 2021 · 1k+ posts · 704 votes
    5y

    Why hard money at all? What is it about your situation that makes you think you need to use HML? DSCR loans are available for both individuals and entities and, IMO, offer more long term flexibility than most any other loan out there right now...

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  • Peter PadalinoPro Member
    Rental Property Investor · Gulf Shores, AL · Member since 2015 · 53 posts · 10 votes
    4y
    Quote from @Eric Feldman:

    Allen,

    You are correct that to refi conventionally it would be much easier and advantageous for you to close the loan in your own personal name.  There are hard money lenders out there that will allow you to close individually.  I am not as familiar with the options in Massachusetts, but know of several in my home state of Texas.

    Eric, I wold love to chat with the HM lenders you know of in TX that will provide lending outside of an LLC. I'm in the process of selling our one rental that's in our personal name and we'd like to do a 1031 exchange without transferring the current (personal name) title. If you could pass along the lenders you mentioned, that'd be terrific.

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