how do the loans work as you scale?

[Andrew C.]

Today, I own a small real estate company (LLC partnership). It owns 1 property, which it rents, and has one mortgage against that property, which it pays. I personally guaranteed that loan based on my assets and income, which is fine for now. But...that clearly won't scale and the point of doing this is to be able to quit that W2-paying job. So at some point there must be a way to not have to guarantee future loans. How does that work?

Let's fast-forward a bit as this RE business scales. Let's say it owns 20 properties, each with PV 150K. It has 3M in assets and 2.4M in mortgages, for net assets of 600K. It gets 1% per month in rent and pays .8% per month in expenses (PMI, maintenance, mgt co, etc).

So at the end of the year, that business files the following:

income: 1.5k*20*12: 360K

expenses: 1.2K*20*12: 288K

profit: 72K

depreciation: 3.5% * 3M == 105K

that entity files (because it's a partnership) and it issues a K1 to each of the partners (me + spouse) that passes everything through. And let's say I've since quit the W2 job. collectively, our personal return would look like:

72K passive income, 105K passive loss. So 72K income and no taxes, with some carried fwd losses. woot.

That's pretty great, but it's not going to support signing as the guarantor for the loan on houses 21-25 that the business wants to acquire, or to sign my personal income against new loans if the business wanted to refi the current 20 houses.

So, at SOME point, it seems the business has to be able to do this on its own. It has, in this example, 360K in income and a track record of renting houses profitably. Are there loan types that it could apply for that would not require me to guarantee it based on my income? Surely this is how larger rental business scale, right? What are those loans called, and what's required to qualify for them?