Conventional vs Commercial

[Joshua Boyce]

I’d like to buy my rentals with my LLC, but I told I can only use a commercial loan in that case. I was preapproved but I’m not sure how good the terms are and what to negotiate. Does it makes sense to buy in the LLC and not go for conventional loans? The bank said if it bought in my name and then transferred, I’d owe a significant tax. I’m trying to figure out my best loan option and if these terms are good and should be negotiated. Thanks for the advice! Term: 20 year Interest: 5.5% Re-pricing every 5 years at current treasury rate plus 2.7%

[Brian Garrett]

You will always get the best rate and term with conventional loans.

You are correct that you cannot get a conventional loan under the LLC though.

You'd be better off with regular Fannie/Freddie loans and an umbrella policy.

The only reason to get a commercial loan would be if you are not bankable.