Can Multiple Investors Pursue One Loan Together?

Question

Hello BP Members,

My inquiry is regarding if multiple investors can acquire a loan together?  If there are 3-4 people, can financing be pursued for a real estate flip project? How does the financing work; primary owner and the others investors are co-signers??? How are the incomes of all 3-4 people considered into the transaction??

Please advise if you are familiar. If you have references of lenders to pursue, please include them.

Thanks!

Michele B. · Answer

Yes get a LLC or a partnership formed defining who gets what percentages. Everyone will have to sign for the loan and all the credit reports will have to be looked at.

Tag me if you have more questions.

Bob Green · Answer

Guac,

YES! You should form LLC together, and structure the % accordingly. Typically any member 20% or greater owner is required to sign loan documents. The borrower and co borrowers will be listed in order of high to low %.  With fix n flip loans, debt and income is not a factor. Credit, experience and liquidity are the determining factors to be approved.

Michele B. · Answer

some lenders do a multiple of types of loans some do just one type. At a bank they usually have one person for each type of loan they do.

You can also find a consultant that will go find the exact loan you want at the best price.

Again if you have further questions tag me.

Doug Shapiro · Answer

Hi Guac,

Yes - what you are describing is a co-purchase.  All of you can be on the loan.  Just make sure you all really trust each other because if one person stops paying their share of the loan each month, then everyone else on the loan will still be just as responsible for paying it.

Stephanie P. · Answer

There is a whole level of lender/broker out there that only does non owner occupied loans.  Only lends to LLC's and doesn't care about the borrower's(s) income.

Can Multiple Investors Pursue One Loan Together?

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