Line of Credit for Property in a Multi-Member LLC

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Line of Credit for Property in a Multi-Member LLC

Krystal C.Pro Member
Member since 2020 · 15 posts · 3 votes

Hi! I inherited a property in NYC with no mortgage and I will be putting it in an LLC with my mom and my sister. Once it's in the LLC, how do we get a line of credit? Will a lender need to review our individual credit history/worthiness?

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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
6y

@Krystal C.

You may want to reach out to a couple of lenders now to see if they will lend do the LLC.

In general - expect someone in the LLC to personally guarantee the loan/mortgage.
I think lenders will want to see credit worthyness of anyone who is a managing member and/or with above 20% ownership.

[email protected]917-280-8544
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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    6y

    @Krystal C.

    You may want to reach out to a couple of lenders now to see if they will lend do the LLC.

    In general - expect someone in the LLC to personally guarantee the loan/mortgage.
    I think lenders will want to see credit worthyness of anyone who is a managing member and/or with above 20% ownership.

    [email protected]917-280-8544
    Basit Siddiqi CPA4.880 Reviews
    View Page
    1Reply
  • Krystal C.Pro Member
    OP
    Member since 2020 · 15 posts · 3 votes
    6y
    Thanks Basit!

    Originally posted by @Basit Siddiqi:

    @Krystal C.

    You may want to reach out to a couple of lenders now to see if they will lend do the LLC.

    In general - expect someone in the LLC to personally guarantee the loan/mortgage.
    I think lenders will want to see credit worthyness of anyone who is a managing member and/or with above 20% ownership.

    0Reply
  • Daniel DietzPro Member
    Rental Property Investor · Reedsburg, WI · Member since 2011 · 1k+ posts · 857 votes
    6y

    We just did this in one of our LLCs that owns several properties. We did it through the same local lender who holds the first position portfolio note on them. They had no problem doing that (but did say they would not do it IF they did not hold the first lien).

    We could do up to 80% LTV, and they let us use the appraisal that was about 3 years old at that time since they felt property values had only gone up from that time. We did have the option of paying for a new appraisal, but we were fine with it where it was for our needs.

    [email protected]608-524-4899
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  • Albert Bui
    Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes
    6y

    I was also able to obtain this commercial LOC on my LLC as well with a local credit union up to 80% LTV interest only with 60 months term at .5 pt origination + 500 processing so all in all not horrible. I like the simple interest calc based on 365 days X daily balance vs the other methods of interest calculation.

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