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Updated about 3 years ago,

User Stats

11
Posts
5
Votes
Corey Farnsworth
  • Rental Property Investor
  • St Augustine, FL
5
Votes |
11
Posts

How does a Lender/Broker view transactions for an LLC?

Corey Farnsworth
  • Rental Property Investor
  • St Augustine, FL
Posted

Hello BP Community! 

I'm new to the game of real estate investing and I'm doing my best to dig deep into the resources available here to make sure I start off on the right foot! The BRRRR strategy appeals to me in the pursuit of long-term Buy-and-Hold properties (SFH, DPX, or TPX). As I research the Pros/Cons of getting an LLC, I have also arranged meetings with both a Real Estate Attorney and a CPA. Note that my long-term goal is to set up systems for my investing business to facilitate long-term use.

From my understanding so far, an LLC is helpful in that it offers tax advantages and asset protection (if handled properly). However, since it is a business entity, the LLC may also create additional challenges when trying to arrange financing. It seems the LLC will be necessary for my long-term strategy, but is it actually a hindrance when starting out?

The Question: 
How would these 3 different parties (hard money lender, local credit union, loan broker) each be willing to engage with an LLC at the start and end points of the BRRRR process?
   1) Up-front capital (or loan) to purchase a property
   2) Post-rehab refinance to pull cash out of the property

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