Does anyone know of a bank or a credit union that will give a mortgage/loan on a property in Indianapolis that is owned by an LLC? I am trying to decide if I should buy under my personal name or the LLC.

Simon

@Simon Stahl , look to local banks / credit unions. You shouldn't have trouble finding one that will lend on a property owned by a LLC. Just know that they will probably require a personal guarantor.

Thanks for the info @Jaysen Medhurst . I can give a personal guarantee, that is not a problem. I just want the property and the loan to be under the LLC.

Anyone has a recommendation? That would save me a ton of time on the phone :-)

You need to look locally or regionally for lenders usually (at least for good ones) so those of us in different regions can't help you. Start by looking up the head of commercial lending with all the banks near you and I usually email with a brief overview of what I'm looking to do. That usually sets up a phone call or a referral to someone who you can talk to. I think almost every bank that does commercial will be able to lend to an LLC.

The real issue to decide between personal and LLC is what your intent is. You cannot finance with a residential mortgage if it is not in your personal name. If the unit size is 4 units or less and you don't have a max number of residential mortgages in your name (usually 10 and 10 more in your spouses name) then you should go with personal and residential mortgage first because the terms are usually always better and the rates are much lower. Commercial loans are usually 5 year terms instead of 30 year which means you'll have to refi in 5.

If you are buying 5+ you must do a commercial mortgage. Then you could buy the property in your personal name but I think it makes better sense to buy in the name of the LLC because for legal cloaking and so it doesn't show up on your credit report...more importantly is the issue of non-recourse vs. recourse. If it is a commercial loan the bank will require recourse in your name (meaning they can go after you/your assets in default) if you don't have a track record. Buy ideally you want non-recourse with no personal liability for the loan.

@Simon Stahl - The national lenders I get my loans from for my personal portfolio allow LLC borrowers. They also don't require W2s or tax returns which is ideal in trying to grow a large real estate portfolio. Message me if interested.

Originally posted by @Simon Stahl :

Does anyone know of a bank or a credit union that will give a mortgage/loan on a property in Indianapolis that is owned by an LLC? I am trying to decide if I should buy under my personal name or the LLC.

Simon

 Hey Simon

I always recommend investors do as many properties as they can under their personal name in the beginning (Fannie Mae allows up to 10) and then start going with the LLC's. If your concern is liability, get an umbrella liability policy. It's a lot cheaper money and the umbrella should give you adequate protection. If you're using any personal funds, unless their use and acquisition is documented properly, can take down the corporate veil and be porous. Even if you end up going the LLC route, I would consider an umbrella liability policy.

Tom

Thanks Account Closed. I am currently leaning toward getting them under my personal name as well. It just makes everything so much easier. I still wanted to see if it would have been possible to get them under the LLC.

Originally posted by @Simon Stahl :

Does anyone know of a bank or a credit union that will give a mortgage/loan on a property in Indianapolis that is owned by an LLC? I am trying to decide if I should buy under my personal name or the LLC.

Simon

 Another option that works for investors using more traditional sources of financing is purchasing a property under your personal name and then transferring it into a Land Trust. This  does not trigger the same flags with traditional lenders, and when established correctly can keep your name anonymous from public records. Check out this article for a bit more information.

If the LLC owns the property and no much track record, does it mean most traditional lenders won't lend to you? Thanks.

@Simon Stahl   Typically you'll have to get a commercial loan if the property is in a business name.  

Originally posted by @Lei L. :

If the LLC owns the property and no much track record, does it mean most traditional lenders won't lend to you? Thanks.

This is a better question for a banker. Generally lenders prefer to lend to an individual because they have more leverage to collect than from an LLC. But with the use of Land Trusts you can purchase the property in your own name and then transfer into the Land Trust which is housed within the LLC, which will not limit your financing options like purchasing a property directly into an LLC would. Still depends on the situation. This isn't legal advice, just some insights from me as an investor.

Btw, I have also talked to banks that told me that they are fine if I move the property into an LLC after the loan has closed.