LLC Commercial Loans

[Sean Beyrouthy]

Hey everyone! Partners and I are intending to buy SFH or multifamily home through a commercial real estate loan. I am aware that commercial loans are mostly used for properties above 4 units, but we intend to buy within an LLC and most lenders will not allow us to use conventional loans through an LLC. I wanted to post on here to get some pros/cons of my situations as well as anything I could do to entice the lender or offer to get the best terms. We plan to buy college houses and rent to students so the cash flow will be substantially higher then if we were to go the traditional route renting to families. My research shows you have to put at least 25%, comes with higher rates, and possibly balloon payments. I would love feedback on people who have gone through the process of commercial loans on residential real estate. Thank you!

[Stephanie P.]

@Sean Beyrouthy

You should look into a DSCR loan. No income verification. Rates in the 5's. 30 year fixed or the now popular 40 year option (10 year interest only and 30 year fixed thereafter).

You can do it in an LLC and you only need 20% down (although pricing is better the lower the ltv).

Stephanie