Buying with my LLC

[Jamie Smith]

Hey everyone. I am a new investor; I have taken out a HELOC on my primary residence to help with any RE investing cost. I want to buy my 1st property through my LLC, but I am pretty sure a lender will still use my personal credit to purchase my rental property. How much, if any; will having a few personal credit lines and debt effect my possibility of getting a loan for my first rental, even if I purchase it through my LLC?

[Brandon Beardt]

Quote from @Jamie Smith:

Hey everyone. I am a new investor; I have taken out a HELOC on my primary residence to help with any RE investing cost. I want to buy my 1st property through my LLC, but I am pretty sure a lender will still use my personal credit to purchase my rental property. How much, if any; will having a few personal credit lines and debt effect my possibility of getting a loan for my first rental, even if I purchase it through my LLC?

 Hi Jamie,

Congrats on taking the next step in your RE investing career! You are correct in that all lenders will use your personal credit score for qualification when purchasing your next rental property. Your credit score will determine which leverage threshold you're able to go up to (max LTV%) as well as the pricing/interest rate for your file. If you plan on purchasing your first property with an LLC, you will not have the ability to use conventional financing. You'll need to look into more of business purpose type lending options (DSCR, commercial, Non QM, etc). For most of these types of loans, there is no DTI calculation. Therefore, you don't have to worry about credit lines showing up on your credit report or anything like that. Most just want to make sure the asset/collateral itself is a worthy investment and that the numbers make sense. All in all, there really isn't anything stopping you from getting a loan for your first rental (unless you don't have the funds needed for closing or your FICO score is below the specific lender's minimum requirement). Wishing you the best of luck!