Where do I get financing?

[Valerie Wright]

I am trying to purchase my first duplex. I have 2 SFH by way of previous primary homes. I have a tax lien property that I purchased with a business credit card. Now I am ready to move on to bigger lol. I am confused about the financing part. How are you financing your real estate investments? I read several forms here and I am still not clear. The duplex I am looking at is 150,000. Do I just go through traditional funding? Can i get a mortgage loan with my LLC ? My personal credit is above 800 and my business paydex score is 92. Any advice is appreciated. Thanks in advance.

[Daniel Holmlund]

Hi Valerie. Congratulations on looking to buy your first duplex! With a credit score over 800 you should be easily able to get conventional financing from a bank or credit union. Banks will generally allow up to 10 mortgages on properties by an individual. Forming an LLC has advantages mainly in that it limits your liability. If a lawsuit is filed only the assets in the LLC (the house) are at risk and your personal assets have some protection.

Most lenders will ask you to sign a form that says that you will personally guarantee the loan even if the duplex is owned by your LLC. So the LLC's real benefit is in asset and lawsuit protection, and it usually doesn't affect the fact that the lender will want you to personally guarantee the loan.