Preparing to purchase a 10-20 unit multi-family

[Jim Miller]

Walk me through the order of organization for the purchase of a small multi-family home (10-20 units)

I have purchased several single-family, commercial, and duplexes before and have always taken ownership in my name. I am setting myself up to buy a larger unit soon and want to do so in an LLC. I also need to show proof of funds or have a preapproval letter.

What comes first, identify the property, then the LLC, and then financing approval? Or the LLC, preapproval and then find the property? And does it matter what state the LLC is in? I live in Florida and am looking east coast from Pennsylvania to Florida

[Hunter Vigneault]

Got it. Putting the loan in an LLC's name is unlikely to be an issue. As you said, most banks expect it and some even require a special purpose entity be created for the purpose of holding the real estate securing the loan. On smaller (sub $1m) or portfolio loans, you'll almost certainly still be personally guaranteeing the loan.