Getting Started With Rentals + Creative Financing

[Chloe Aribo]

I am getting started with purchasing rental properties and am still stuck on setting up the structure of my business.

I plan to either use personal or commercial loans depending on the best deal for the property. 

If I choose to create an LLC for each property I purchase:

1. When do I create the LLC, before or after I find a property?

2. If I create the LLC after I find the property, how do I get the LLC pre-approved for the loan?

3. Is the process of getting a new LLC pre-approved for a loan difficult? Considering the LLC would have no credit history.

Is it best practice to create an LLC for each property? There are mixed reviews everywhere I read.

Thanks!

[Stephanie P.]

Quote from @Chloe Aribo:

I am getting started with purchasing rental properties and am still stuck on setting up the structure of my business.

I plan to either use personal or commercial loans depending on the best deal for the property. 

If I choose to create an LLC for each property I purchase:

1. When do I create the LLC, before or after I find a property?

2. If I create the LLC after I find the property, how do I get the LLC pre-approved for the loan?

3. Is the process of getting a new LLC pre-approved for a loan difficult? Considering the LLC would have no credit history.

Is it best practice to create an LLC for each property? There are mixed reviews everywhere I read.

Thanks!

Until you get a bunch of properties, I'd try to use conventional financing (it's cheaper) and not worry about LLC's. If your concerned about liability, then get an umbrella liability policy and take the cheap money.

Even if you're using a DSCR loan, you can get them in your name and don't necessarily need an LLC.

Stephanie