Beginning stages of buying small apartment building

[Justin Goodin]

I am in the beginning stages of buying an apartment building and I am going to begin calling a variety of banks for financing options. 

I know this will be a long process with a lot of them turning me down, but do I need to register an LLC before I start making calls? Will they be more likely to take me serious if I have an LLC?

[Jeff Copeland]

If you want to form a parent LLC or holding company for legitimacy when talking to banks, or to show cash reserves, there's no harm in that (but it's not absolutely necessary either).

With regards to the LLC that will own the property (which may or may not be the same), I don't think it matters that much. The bank will care more about the property's performance (the debt service coverage ratio in particular) than the ownership structure/name.

Even very experienced investors often don't form the LLC for a particular purchase until after going under contract.

It's far more important to understand the metrics they will be looking for and be prepared to discuss the bank's underwriting requirements for the property and loan.