Hello 👋,
I bought a property for 100k on the name of an LLC with cash, used my personal money to fund the LLC and spent 40k in rehab. The house appraised to 180k. I tried to get a home equity loan and the lenders are denying me as the property is owned by the LLC. What are my options to get 100k (my original purchase price) as loan to buy my next flip?
🙏 thank you!
Loan on a property owned by LLC
byu/Biggfoott0221 inRealEstate
Posted by Biggfoott0221
7 Comments
Most banks won’t do residential loans to LLCs because of Dodd-Frank regulations – you’ll probably need to look into commercial lenders or portfolio lenders who keep loans in-house instead of selling them off
This is one of those things you should have figured out before throwing money at it
You need to apply for a DCSR loan. They won’t approve a traditional mortgage for this.
I have avenues that will allow cash-out refinances under the name of your business. Dm me
DCSR loans (debt service coverage ratio) are your best bet for this situation. Talk to lenders who specialize in investment properties and commercial loans, not traditional residential mortgage companies.
You need a commercial mortgage, specifically a cash out refinance. Any community bank can provide this loan. They can make the borrower your LLC and you a personal guarantor. They will need two years of tax returns and a personal financial statement form (they will provide).
Note that they likely will lend you up to 65-70% of the appraised value of the property. The loan likely will be for 20 years.
You should have structured your purchase , knowing your exit. Are you holding the property, or flipping? If flipping, selling it. If renting it, get a DSCR loan.