How do I get 30 year term?

[John West]

I get why 30 year loans are best, and I'm not posting to debate that. I'm trying to achieve it. I've called 10 different banks mostly small or local credit unions. I can't find anyone who gives 30 year loans. I'm purchasing my second property now and debt to income will be a problem with my next property. (I just purchased my first property 4 months ago and no one wants to count income from that until it's been a year). As soon as I say "LLC" or "investment property", everyone tells me the max term is 20 years. Does anyone have advice on finding banks that will entertain a 30 year mortgage for investors? Is anyone else having the same problem?

[Scott Trench]

@John West I've fired several lawyers over this issue. For some reason, people are unable to understand that I can't get conventional financing on 30 year terms if the property is owned by an LLC. I can absolutely go to a private, non-conventional lender and get whatever terms I work out between with that individual or private business. But, generally speaking, the interest rate, and therefore the cash flow and overall financial picture around a given property will be impacted negatively if I choose to put the property in an LLC and get a non-conventional loan.

Additionally, if I move my property into LLC after financing with a conventional loan, I will be in direct violation of the due on sale clause. I feel that the risk of them calling the note due in a high-interest rate environment in several years is far greater than the risk of a catastrophic lawsuit that my insurance does not cover. That's my personal choice.

This is why I do not use LLCs at my stage.

After I have accumulated significant assets ($1m+) perhaps I will begin moving all of my properties into LLCs and sacrificing cash flow and terms for additional asset protection. But for now, I feel that in my situation, the advantages of excellent long-term financing at great low rates (especially in today's interest rate environment) outweigh the unlikely event that I get sued for an amount that would bankrupt me. I also have insurance to protect me from that. 

I'm very tired of hearing advice from folks that are not in my stage of investing telling me that an LLC is a must-have. An LLC is great, and I will use them, just not quite yet at a still low level of net worth (less than $1M), and while the party is going on with great financing options. The folks that ARE in my stage of investing, or built wealth the way that I am building it, tend to agree with me, but perhaps we will see continued debate about this topic going forward.