Entering rental business in Wayne County, MI

[Shehan Omantha]

I am in Wayne county, MI and planning to start a rental portfolio together with three of my friends. We incoporated a LLC and are looking to get a portfolio loan for the LLC. We talked to about 30 local banks so far but they refused to grant a loan to a fresh LLC. Some bank say they would lend to us personally and then suggest to transfer the deed (not mortgage) to the LLC. Could you recommend a financing strategy for our scenario and give us some names of local banks who would grant us a portfolio loan?

[Kevin Romines]

You can get a Fannie Mae loan in your personal names and then transfer the title to the LLC. Fannie Mae changed their rules back in 6/1/2016 to now allow it and it wont violate the "Due on Sale" clause. But you are still personally guaranteeing the loan.

You could take out a Non-QM loan in the name of LLC. Most require a personal guarantee, however there are a few that don't require it. You would have to talk with Mortgage Bankers and Brokers to get access to those kinds of loans, also interview your Loan Officer to make sure they have done a few of these, as the average Loan Officer may not have some experience with these loan types.

Or you can do a commercial loan, most likely with a Mortgage Banker or a Broker. The average bank will not lend to newbies, however there are commercial loan out there that will. So it could take some searching to find those lenders. 

I hope this helps?