New to Bigger Pockets - New Investor

3 Replies

I am new to investing in flips and rents. I have an investor providing capital for my venture allowing me to do the sweat equity - hands free. I have recently purchased the 90hr real estate course to get my license in Tennessee. I need advice from a CPA point of view, as well as, an investor point of view of how banks perceive my capital. Is it best to have an LLC, simply use my personal account, or is there another business model to maximize ability to receive funds from lending institutions, credit lines, mortgages, etc. Looking forward to all advice. And a special Thanks to BP for having an awesome tool like this to help ppl like me.

@Corey Moore

Is your investor investing in debt or equity of your deals?

In other words, are you and the investor going in on deals together? If yes, you may need to reach out to a portfolio lender for feedback. Call up a couple portfolio lenders, tell them your scenario and ask them if they will lend to you.
If yes, great. If they say no, ask them what you need to do different.

@Corey Moore whether you have an LLC or not makes a significant difference in the types of loans you can get. Generally doing business in your own name will get you better lending terms, but that is probably not a good idea it you have a partner.

Whether to use an LLC is a complex issue and you should talk to a good attorney.

Thanks for reaching out. I literally got on the phone and started calling Banks and mortgage lending groups. Within the first 80 days, the money looks as if it is gifted therefore I would have to go in on the loans together. If the money is given to me directly, it has to season +80days to be considered my capital with no other signatures require, simply qualifying for multiple loans. Locally most of my credit unions will not lend to an LLC therefore I would have to either by the homes outright and not get caught in a bad market shift or use my personal credentials to get lending. Luckily if I can get a couple of buy/holds, then they recognize rental income as soon as producing a lease agree potentially allowing me to leverage the line of credits.