Financing question for a newbie

[Sarah G.]

My husband and I are newbies at investing. We currently have a vacation rental that is free and clear in Arizona. We'd like to purchase some long-term rental properties in Wisconsin where we live. What is the best way to go about financing for this? Commercial? Residential? HELOC? Another option?

Also, we do not have an LLC set up yet. We are planning on doing that eventually. Is it better to do that now or later? We've had mixed advice on this.

[Scott Schultz]

there are several options, you could do a Non owner occupied Cash Out, on the Secondary Market like Fannie or Freddie, you could take a Line of Credit, some banks may do a HELOC most will not because its a HOME Equity Line of Credit, and because its not your Home most will not, but you could do a Commercial Line of Credit, I have a couple, one is for 3 years the other is 2 years, but dont be surprised if they only offer you a 1 year term to start. you could also cash out on a commercial note, 3 or 5 year term, 20 or 25 year amm, these are pretty easy to get if you or the property have decent income, your biggest struggle will be that you are out of state, so may want to look to banks that are in both your home market and where your property is, like BMO for example, still a smallish bank so somewhat flexible, yet large enough to be in both markets, good luck