Banking with business credit!

Member since 2020 · 10 posts · 2 votes

Hello all!

I get that it takes time to build a did business credit and relationship with banks. With that being said. How do you buy a property with business credit.

So obviously the down payment is probably the easiest part. You can take out a 20k loan under your business name for down payment... But I can't really understand how a bank will approve a business for a 250k house investment....

So if I want To buy 250k house... I take out my 20% business loan for down payment, but how do I get approved for a business mortgage Or would that credit be under my personal name? So if I'm into house flipping or the BRRRR strategy... Eventually I'll have so many mortgages on my personal credit reports... Banks will no longer want to give me loans...

Can you take out a 250kmortgage loan with your business (ex. An LLC)

Does this make sense?

0 Reply

24 views

2 Replies

Jump to latestLatest

Sort by

Dan Bryskin
Investor · Minneapolis, MN · Member since 2015 · 252 posts · 263 votes
6y
@Juwan Rohan, what your are looking for is a commercial loan, typically used for retail, commercial or multifamily. You can buy a single family with it, if your bank is willing.

Cons:
- Usually they don't like to lend under a one million for us they require 25% down and 1.1 coverage (ratio of the property income to loan).
- Run of the mill deal in our neck of the woods right now: 20 or 25 year amortization, 5ish% interest( based on the term) and term is 3-7 years, 1% origination
- They require personal grantee
Pros:
1. For us, they are a lot more flexible then traditional financing and will finance a rehab (75% of AVR or 75% of the project whichever is less)
2. It's a business credit not personal. They eval a property not so much a borrower
0 Reply
Juwan Rohan
OP
Member since 2020 · 10 posts · 2 votes
6y
Got it!!thank you so much for laying out the pros and cons... Is this the way most real estate investors go aboutbuying houses or is this a more advanced way after you've had a few under your belt?
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.