New York City · Member since 2018 · 161 posts · 75 votes
Does it make sense to start an LLC in a state you have no property in for the sole purpose of getting a HML for properties in that state to either fix and flip or attempt a BRRRR at? I currently have properties in a few states (Ar, AL, MO) but I want to start either flipping or attempt my first BRRRR in Indy. I've talked to a few HML's. A few are willing to lend to me and a few are willing to lend to only an entity.
Should I create an Indy LLC to get a HML loan? Would a Al, AR, MO LLC suffice for HML Entity requirements? If I were to use an OOS entity, would I have to register it to Indy if I got a HML for a property there?
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
7y
Lot of questions there. Short answer is every HML I know will only lend to an entity. It doesn't matter if it's in the state of purchase, but they can't lend to a person because there would be licensing issues as well as Dodd-Frank issues. If you want to flip I would say yes you should create an entity as you're essentially going into a business venture to begin with. You want to start separating your business ventures from your personal ones in that case as soon as possible.
Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
7y
@Wei Jie Yang I'd agree with @Odie Ayaga most HML's that I've ever come across or done business with lend to an LLC, you should work with a CPA or attorney as I am neither but it sounds like an LLC would be your best course of action. If you need a good Real Estate Attorney or Real Estate CPA DM me I have both