My 2 Options: Personal vs Commercial Loan

[Danny Lyu]

Hi All,

First-time poster here. I’m currently in the pre-approval process to purchase a 2-4 unit multi-family property. I’ve approached a local bank in Upstate New York offering a 30-year loan with a 10% down payment. However, the loan would need to be under my name, as they won’t allow LLCs.

I’ve received advice from others who feel comfortable with this arrangement as long as they have high insurance coverage limits, which the lender also recommended. Assuming the insurance premiums don’t significantly impact my cash flow (which is one of my primary goals), how do you assess the risk of taking out a loan under my personal name versus opting for a commercial loan that requires a larger down payment and comes with a higher interest rate?

My goal is to spread my funds across multiple investments to grow my portfolio while keeping my down payments as low as possible. At the same time, I prefer to minimize liability, though I’m not a seasoned investor.

Is this one of those calculated risks that investors eventually become comfortable with, or should I prioritize limiting liability from the outset?

Thanks in advance for your advice!