LLC and the impact on financing

[Kristina Inglis]

Hi, 

I was talking with a lender today about what their rates are as I'm looking into making an offer on a triplex. The mortgage guy told me that since I plan to put the property into an LLC (which I do) that he'd need to consider the property as 'commercial' which fetches higher rates. The fact that it would be in an LLC would mean at least a half a point higher. I've had many conversations with lenders/ brokers and this has never come up. Did I really miss this important relationship between an LLC and financing? Do all you LLC'ers really pay higher rates due to the fact that the property is considered commercial? Is there a way around this??

Many Thanks!

[Wayne Brooks]

Yeah, forget the stinking llc, just keep decent insurance.  An llc eliminates conventional financing (fannie, freddie,etc) and not only will you pay higher rates, but you won't get 20 and 30 year loans.