Financial approach to personal and investment properties

[Tomas Saenz]

Hello BP Community,

Something I have been thinking about recently and would appreciate guidance or thoughts on. This year I will be purchasing a personal residence and an investment related property (2 separate purchases).

1. In terms of financing these purchases what is the best approach? Ideally, I would like to keep both separate to ensure best financing options on my personal residence purchase. My questions/ideas are:

A) Purchase the investment property under an LLC so that it does not affect financing on my personal residence? Ex. if I were to purchase/finance the investment property under my name (non-LLC) this now affects the amount I qualify for on a personal residence, interest rates, conventional financing products like FHA, Fannie Mae, DP assistance etc, my debt to income ratio

B) Can I separate both purchases financially speaking so that a hard money loan, commercial, investment related financing on an investment property do not affect my ability to qualify for conventional financing on a personal residence? Is this achieved with an LLC to separate the investment purchase from my personal residence?

Ultimately, it would not be ideal to have the invest property loan/financing show up on my personal name and negatively affect financing on a personal residence; the amount I qualify, rates, conventional financing products, debt to income ratio etc.

I am trying to wrap my head around how to best approach this so if anyone has experience doing this please let me know! thanks BP community.

- Tom Saenz