Company owned investment properties

[Alfred Harris]

Good morning,

I have a question... I'm very new to real estate investing. I'm in the position to buy my company's first investment property. I have talked to a some banks about getting a pre approval. I have great credit and the only mortgage I have is my personal home mortgage. I have a business partner and he of course goes half on most things. With this being our first investment property, I want to purchase the property under the business name. But that's where the problem comes in though. All the banks I talked to did not want to me apply under my company name. Granted I know my personal credit will be looked at as well as my business partner. But i want to put it under my LLC for asset protection purposes.

So I guess the question is, does anyone have any advice on my situation? Is this common with traditional financing? I am looking for the best options for this situation.

Background: $125,000 fully occupied duplex. Both sides bringing in $700 a month.

[Kevin Romines]

@Alfred Harris There are 3 ways to go about what you are wanting to do. 

1) For the best rates and terms, you buy the property in your personal name using a Fannie Maae loan. After closing, you transfer the property to an LLC that the borrowers are the majority members of. If you do this in this way, it will not trigger the due on sale clause, as Fannie Mae changed their rules 2 years ago to allow this.

2) You buy the property in the LLC and use a portfolio or Non-QM loan. These loans are investor friendly loans. You can buy and title in the LLC, however most investors require a personal guarantee, some don't? The interest rates are generally 1-2 points higher than Fannie Mae, however you can buy 1-4 units up to 85% LTV versus Fannie on 2-4 being 75% LTV.

3) You buy and title the property in and LLC and use a commercial loan. Most banks can do this loan for your or other mortgage companies. The terms are usually a 5,7,10 ARM. They typically don't have longer terms available. The interest rates should be in the neighborhood equal to a portfolio or Non-QM loan.

I hope this helps.