Personal or Commercial Loan

[Christina Arango]

Hi everyone,

I've been calling/visiting banks in my area to decide where I feel comfortable.  I am a newbie investor getting ready to purchase our first rental properties (I'm hoping to buy 2 this year and 2 per year hereafter, assuming I get along with this business).  We are looking to diversify our income-producing investment holdings.

I've read the articles about forming an LLC, and we have decided to do that since we have quite a few assets that we want to protect.

Today I talked to a loan officer that told me that I could easily transfer the title over to my LLC after signing a personal loan and that the bank would probably never find out. But then he also suggested that I look into commercial loans if I want my LLC to hold the loan, and assured me that they lend amounts as little as $20k up to the really big numbers. He also mentioned that I might be able to secure a line of credit that I could use at my discretion.

So, my question:  Should I try to go the commercial loan route or wait until I have a few properties to explore that avenue?  From what I've read the downsides to commercial loads are: larger down payments, higher interest rates and shorter terms.  Anything else?

Thanks for any advice that you can offer.