Earth Berm Financing for LLC

[Josh Boyd]

Hello everyone,

(Rookie Investor Here)

I looking to find a lender that will lend on an Earth Berm Home.  

Situation: I am selling my home and will have approximately 134k in equity once the house closes and my agent is paid. I have a family member that is willing to sell me their rental house for 155k. This is only a 21k difference. I estimate the home to be valued at 250k. I would like to make this purchase using my LLC by financing 75k at 30 years. After I pay off the 21k remaining balance that I would owe, my business would then be able to use the remaining 54k for the next deal. I would be living in the property as the tenant.

Problem:  The property is considered an Earth Berm property.  It is partially built into a hill (and for this reason has really low operating expenses).  I am finding that acquiring a loan from a bank is difficult.  

Added information: I have a high personal credit score. I am open to financing the property as an individual rather than an LLC if needed, though not what I prefer. The house is in great condition.

Long Term Play:  Over the next 12 months, we want to upgrade the interior and then rent it out to others (House Hack)

Thank you

[Erik Estrada]

Hey Josh, 

Something to consider: 

Is this your primary residence or an investment property? 

Are there any comparables for this property nearby? You might run into trouble when it comes to the appraisal. 

In either case, you might be able to get away with a private money or hard money loan if it is too unordinary of a property.