Fixed rate mortgages?

5 Replies

Hello, I have a financing question for anyone who might have some insight. I recently signed a contract on a single family residence that I am going to be adding to my portfolio and have an investor who will be putting up the cash for the down payment. however I will need to gain financing to cover 80% of the purchase price. I have now talked with 3 community banks about financing this property in my LLC's name with a 15 or 30 year fixed rate but have been shot down each time due to it being an investment property. All banks are telling me that I have to go through the commercial lending side and the best offer they've got is a 20 term which would be 5 years fixed, 5 year adjusted, and a balloon for the last 10 years. I only want to have my properties titled in the name of my LLC (for security purposes) but can't seem to get a good fixed rate mortgage doing that. The banks are also saying that I can't take out a loan in my name and take title in the LLC's name, even though I am the sole member in my LLC. I know I've heard in the forums and on podcasts that investors are getting 30 year fixed rate mortgages, but how?

@Jacob Tracy

I've looked in my area and have found the same, I'm not aware of any big/formal lending institution in my area that will give a 30 yr am fixed rate loan to an LLC. The best I've found under that scenario is 10 yr fixed Term and 25 yr Am, with rates varying 5.5-6.5%

afaik the 30 yr fixed is only for residential loans to an individual and it's so the loans can be packaged for securitization. Buyers do it that way and then transfer title to an LLC, they just hope the lender never notices.

I suppose there's the BOM/private lending path, or seller financing.  Otherwise why not take the commercial loan and just get it paid off sooner?

it looks like that's exactly what I'll be doing. as long as there are no big events that happen in the next 5 years it shouldn't be a problem. however it is a bit of an extra risk and I don't love the idea. I had thought of purchasing/taking title in my own personal name and then deeding it to my LLC after the fact, but it just feels like a bad idea. especially since the lender could call the mortgage due if they were to find out. I'm definitely not in the business of being dishonest or unethical. thank you for your thoughts! I appreciate your insight.

Hold the property in your own name if you want a 30 year fixed at a good rate.