Refinancing a Property and Operating as an LLC

[William Hurd]

My brother and I are just getting started out in real estate investing and are looking to follow the BRRRR strategy and looking to acquire our first property within the next 6 months. We are trying to be diligent on the front end and are reaching out to potential lenders to discuss financing options for when we get to the "refinance" portion of the BRRRR strategy. After talking with multiple traditional lenders, we noticed that there are multiple options in terms of lending outside of the traditional fixed rate loans. Options such as 10-, 15-, and 30-year loans, 10/6 arm, 10/1 arm, 5/6 arm, 5/1 arm loans are available. One common issue that we see from most lenders is that the 30-year fixed loan comes with a price (e.g. costs 3.5 - 5.5 points to obtain the loan). The second issue is that most of the lenders that we call will not allow for an LLC to have the loan and it has to be in an individual's name.

My question is 1) Do you have any recommendations on lenders who are investor friendly? 2) Do you advise agains ARM loans, and what are the pros and cons? 3) Any advise on purchasing properties as an individual vs as an LLC?

Thanks,