10 units building financing question

[Kate J.]

Hi All. I have a question on the best way to finance 10 units. Do I understand correctly that it does not matter if the owner occupies one or not? Also what is the best financing one can get? Should it be under the owner's name or LLC?

[Salvatore Lentini]

@Kate J. - You can finance in an LLC name or individual. There are experts (lawyers, accountants, investors) that can make a case for either route. I've financed all of my properties (single family, multi family, office and commercial) in LLC names but I know many that don't on MF of 10 units and below. Best financing will depend on many factors: the revenue and expenses of the property, appraisal, LTV, LTC, the area, your experience, occupancy %, length of leases, credit score etc. Once you get into commercial loans (5 units and up) it can get a little tricky. Reason being, on single family loans, especially if you only have a handful, you can often qualify based on your income. Once you start buying more expensive properties (like a 10 unit) it's harder to qualify based on income. I ran into that problem on my way to 83 rentals. I now have a "little black book" of investor friendly lenders that I work with to close deals quickly without W2s or tax returns. It's been a game changer.