Multiple llc for commercial loans

[John Robert Kinsella]

I'm Trying to understand the full potential for llc and commercial loans..

I've been working with a commercial banker with my partner and it's been easy to secure properties with just having 20% down. I came across a property and started a new llc with my sister and purchased another.

My thoughts are to start a new llc with my wife for our own personal properties that are under our name, which will free up personal debt.

I then want to start another llc with my bro in law and buy more through that llc.

Does anyone see drawbacks? It seems by starting new llc I'm able to leverage other people's incomes as well and purchase more. Any drawbacks?

[Will Fraser]

Hi @John Robert Kinsella, you are right about the effect of opening up the new LLCs, but what I'll clarify is this: the reason you're able to get more loans through the new LLCs than with your original ones is because of the additional guarantors, not the new LLC. Commercial loans are a wonderful tool, but the lenders making the loans still look at the borrower's ability to repay and are capped at the amount that they can loan to one person (i.e. guarantor of the loan). If you through more guarantors into the same LLC or new guarantors into a new LLC then the lender's ability to loan just changed (and hopefully increased).

It's a nuanced difference, but I wanted to make sure it's clear.