Mortgage for an LLC?

[Jacqueline Bruen]

Hi there!

I've started an LLC to buy my first residential investment property. I will be able to provide a 20% down payment through the LLC, but the question I have is: don't I need to personally guarantee the loan because the LLC does not have credit history? I've heard it is bad practice to personally guarantee a business loan.

What do you pros recommend? How can my LLC get a loan?

[Robin Simon]

Quote from @Jacqueline Bruen:

Hi there!

I've started an LLC to buy my first residential investment property. I will be able to provide a 20% down payment through the LLC, but the question I have is: don't I need to personally guarantee the loan because the LLC does not have credit history? I've heard it is bad practice to personally guarantee a business loan.

What do you pros recommend? How can my LLC get a loan?

This is very common for "DSCR Loans" - can generally go through the LLC, it can be new and not an obstacle - but you would be personally guaranteeing the loan. However, the guaranty would only apply to the specific property after the lender has exhausted getting funds back after a foreclosure - so its less a worrisome guaranty than if you were just overall guaranteeing a business loan, since the real majority of the collateral and recourse is going to fall on the property