LLC - Residential financing - Nashville

[Jordan Nikolaisen]

Hello everyone,

As the title states, I’m a rookie investor in the Greater Nashville area. By rookie, I mean, I own zero residential properties other than my primary residence, but am working towards my first investment property.

For this topic, I'm curious about a few things, in regards to residential loans in the name of an LLC.

My plan is to create an LLC from the get-go, and put my first investment property in its name. I'd prefer not to have my investment properties tied directly to my name. The reason of course being- to limit liability.

With that being said-

1.) does anyone have recommendations for local Nashville lenders that will lend to an LLC for residential purposes?

2.) as my llc would be brand new with no financial history, what do lenders look for in that type of situation? I was told I’d need to have a reliable contractor in my pocket, when I go to apply for the loan, as they’ll look heavily at his track record. My issue here is- while I do know a great contractor, he only works for no less than $50k on rehabs, and I don’t know what I can afford yet, or if 50k+ rehab is biting off too much for my first project.

3.) what's a typical down payment for an llc? I don't know if those loans are as flexible as personal loans are. The friend I have who loans to LLCs stated that they always look for 20% down. Is 3% down for an LLC possible or a common thing with the right lender?

That’s all that I can think to ask for now. But I know more questions will pop up.

I’m looking forward to seeing the replies and learning from people who know more than I do.

Thanks!

[Jordan Nikolaisen]

LLCs can work for residential loans, if that's what you are meaning when you say conventional. It is uncommon and most lenders won't or don't have the capacity to do it. I know this because a close acquaintance of mine does them here. They call it an "investment loan," which goest directly to the LLC and can be used for residential purposes. I've asked him some of these questions, but I've taken my questions to the forum to get a wider range of input.

I want an LLC for a two big reasons- 1.) limiting my personal liability should a future tenant sue for whatever reason. 2.) tax advantages