In NC, How do I purchase my first rental property using an LLC?

9 Replies

Hi, this is my first post as a new member and I have lots of questions. My first being, how do you secure your first rental investment mortgage after you set up your LLC? I already own my own home that I still pay a mortgage on 2 pieces of land I own outright but not sure I want to use the house as collateral. What do I need to do to ensure I can secure the mortgage I want without problem?

Using an LLC you will need 25% plus closing costs. Then you need to find a lender. IF you know what it is you want to purchase then ask for a non-conventional or a commercial loan for that amount.

IF you buy without LLC you can usually get a lot better interest rate and longer terms with no balloons on it.

IF you have further questions just tag me. 

At what point in the process should you start putting your properties in an LLC ?

For those of you who do not want to use them in the beginning...

and How would you go about transferring the titles to the properties into the LLC without Paying off the mortgage... (Due upon sale clause) ???

We are in the middle of starting our LLC.

I understand getting better rates with a non commercial loan, But seems like a giant pain the butt, to transfer property, if you don't put the titles in to the LLC at the time of purchase ??? or No ?

I agree with the others-- your financing options get limited with an LLC. Severely limited. And not as good rates.

If you're talking about your first rental property investment, I think and LLC is overkill.

For anyone pondering LLCs for rentals or wondering if they need one, here's a lot of info on why I chose not to do them for my own rentals-

There's more info in the comments as well. But one thing I left out of the article is the overkill part....specifically about how it's really putting the cart before the horse if you are just starting out. You're very likely to end up messing up your options and structure by structuring entities pre-emptively, and it just makes things more complicated when they are already tough because you are new.

Thanks, I would have never thought of these cons but how do you protect yourself and your personal assets once the home is purchased and you have renters? I want to attempt buying 4 rental properties next year and need to make a plan.

Originally posted by @Brittany Pinney :

@Caleb Heimsoth what is 'good' insurance? I'm newer to real estate and don't want to fuss with an LLC yet. What do I need to make sure my insurance has to ensure my personal assets are protected in the event a tenant would try to pursue legal actions against me?

Get an insurance policy with at least 1M in liability coverage.  Then if you have significant (like more then 1M assets) you can add an umbrella policy for another 2-3 million in coverage