Can I buy my first property using a new LLC?

Question

Good Day, recently I created an LLC in order to start investing and buy my first property using the business. Do I need previous tax returns from the business (which I don't have) or I can back it up with my personal tax returns  in order to get a loan?

Angel Gabriel Ramirez · Answer

Thank you so much for the advice. Grateful for the help, blessings.

Jinhee Hann · Answer

@Angel Gabriel Ramirez

Conventional residential lending gets more complicated when you’re trying to purchase in an LLc. Underwriters don’t like it. It automatically implies this is an investment property as well. Rates are higher for non owner occupied properties and downpayment requirement is higher as well.

You can always form an LLC and transfer the property into the LLC AFTER escrow closes.

Also if you plan to refinance the property later, most banks will require you to first take it out of the llc for 6 months before financing it again.

For jumbo or portfolio loans, some banks will let you waive the 6 month period but it is required you take it out of llc before they close the loan.

There ARe exceptions where major bank will let you stay in the llc but restrictions are tougher.

Naoko Potts · Answer

@Angel Gabriel Ramirez

I am a new investor and my LLC is newly formed, and I am in the process of purchasing the single home resident under LLC. I talked to multiple local banks and they offer business loans to LLCs. I provided my personal financial statement and proof of employment as well as my past 2 years of personal tax returns since I would be personally responsible for the loan payment but the bottom line is it is doable and majority of my local REIA group members finance their loans under their LLCs.

Jaron Walling · Answer

You don't need an LLC to purchase property. It's more difficult and most investors don't encourage it.