Do I actually need a Business Loan for this particular Rental

[Hochi Yang]

So my friend and I are going into Real Estate Investing as a Partnership. So him and I will be first time home buyers and we are trying to secure a SFH that is put up for sale in the UW Oshkosh college campus area. So it is currently used as a Rental Property for college students to live in. It is a 5 bedroom SFH but is being rented out to 5 college students. We are obviously trying to buy it for an investment. I went to try and get a mortgage loan through my bank which is a Credit Union and the mortgage loan officer had told me that I would have to apply for a Business Loan instead because it won't be used as a primary residential mortgage and that we won't be living in it. So I went to the Commercial Loans Department to apply for a Business Loan and at first the loan officer had told me that they don't do that there and told me to go look elsewhere. However, when I explained everything in great detail about the SFH rental property and our plans of continuing to rent it out, she started to be a little more interested and started listening. She then started explaining more about the loan process and terms and conditions. She sent me a bunch of forms to fill out via email for the Business Loan. I noticed that the forms were quite extensive and a lot of them asks a bunch of questions pertaining to your business. We don't have a business yet. We're just starting out. It seems like we might have been misunderstood and have been steered in the wrong direction unless I'm just overthinking it too much, because upon research, it seems like a Business Loan applies to Commercial buildings and this property that we are trying to secure is considered a SFH. Am I missing something here? Should I go on with the loan process? Or what are the other options? Because I could not find any information on any Real Estate Investors talking about applying for a Business Loan for a SFH. I only see conventional loans or mortgage loans. Please if anyone can clarify or give me some incite, that would be awesome. Thank you in advance! Any help is much appreciated!

[Loren Clive]

it's better for just one person to be on the loan, if you can qualify that way, because otherwise the entire balance will count against each person on the loan, i.e. each person is jointly and severally liable for the debt. Therefore, it will be hard for any of you to get additional loans without a change in your income(s).

you need to find a good investor-friendly lender who can explain some things to you, not the credit union.