Seasoned Investors..... Commerical Loan or Conventional?

[Jeff G.]

To all you that have several or more properties.

I have two properties under private mortgages I am looking to refinance. My attorney strongly recommends continuing to keep both properties and all additional properties in the name of my LLC.

I can get great rates on the conventional mortgage side but will not be able to keep the properties in my LLC name. Rates and terms for commercial side are 5-5.5% with 25 year amortization and 5 year notes. My properties are, and most additional properties will be $50K and under for the foreseeable future. So I am juggling in my mind the benefit/risk analysis of keeping everything in my name vs the LLC. With such low loan values the interest rates are not THAT big of a concern but they are a factor. Another upside is that on the commercial side is I can have an unlimited number of mortgages. With a rapid growth projection of 1-2 more properties before the end of 2016 and 4-5 next year this could be an important factor.

So I guess I am asking you seasoned investors with large portfolios what you are doing and your reason behind it.

Thank you in advanced as always BP!

[Steve Vaughan]

With your business model of lots of small dollar houses with leverage, I would think the availability of money is more important than a couple % points.  You will quickly run up against Fannie limits of 4 or 10 loans going conventionally.  I'd save those for 'normal' houses over $100k or whatever.  

Have you run into any resistance with these small $ loans?  That's amazing.  You may not be paying much more in interest rate than you would be conventionally.  I bet those are tough to write.  Either way, mortgage rates in the 5s are still awesome historically @Jeff G.