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Updated about 3 years ago,
How does a Lender/Broker view transactions for an LLC?
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