Using my LLC or my personal name dilemma

[Ryan Parsley]

Hi all, maybe not so much a dilemma but i'm having trouble finding answers and cannot get an appointment with my attorney for another week or so. 

Background- Just starting out, have a fix and flip in sight. I have created my LLC and am finalizing my business banking account on Monday. My initial funds are from a personal HELOC and a loan from my parents. The property I am looking at is offered as cash only, fortunately, I have the funds between the HELOC and loan from my parents to pay for the property and estimated rehab, holding, and closings.

I'm on the fence for how to buy, primarily because my backup plan is to use this as a long term rental property if I cannot sell it within an appropriate timeframe which will require securing a mortgage to pay back the HELOC and parents loan. If I buy using the LLC, I will probably have trouble securing a residential mortgage later on, correct? If I buy it under my name, it should be less difficult to secure a residential mortgage as long as my income can support the payment, correct?

How would you proceed? Is there something I am missing here and aside from the liability protections under the LLC what am I setting myself up for in terms of taxes, etc?

[Ryan Muska]

DSCR loans in LLCs are going to have much higher interest rates than in personal name.

I think it is a very circumstantial thing to put a property in an LLC. Lots of them go to tax benefits, but if you plan on purchasing, rehabbing, then refinancing, it makes little sense to purchase in an LLC because the tax savings you would have are likely outweighed by the higher interest rates.

If this is your first time doing this, I'd recommend doing a personal name loan because it will secure lower interest rates for this (almost definite) rough first go which will be a huge learning experience for you. 

Unless you are hard-set on an LLC, I do not think they are necessary and all too often investors think they are the way-to-go when in reality they may be providing little-to-no benefit.

As far as refinancing into another loan in the case that this property does not move, that should not be much of an issue even if you are short of assets due to being able to roll in closing costs into the loan.