New Investors-close in their LLC or Trust

[Joe Mata]

Hello I'm a lender and I'm helping 2 brothers finance the purchase of their 1st 2 investment properties. They're buying 2 Townhomes together. They both own their own primary home and are looking to venture into real estate investments. They're W2 employees with good salary jobs and assets in the bank. We can close these 2 loans in the name of the LLC that they created for this purpose but if we do the loan program that allows to close in the name of an LLC has rates in the 6's OR we can close using a standard conventional loan and rates are in 5's. Someone suggested to close in the name of a trust, which we can do using a conventional loan. Is buying property in the name of a trust common in managing and building investment properties? I also suggested that they simply close in their name and switch to the LLC after closing using a quit claim deed but that could pose a problem with the lender/servicer because you're basically saying you will not do that when you apply for the loan.