Financing Conventional Loan

[Waleep Alvi]

Forgive me if this has been covered elsewhere. Hoping to get info on what to expect in the following situation. I would like to purchase a rental property (less than 4 units) with cash, fix up and get a mortgage on it. Will the mortgage companies look at the property as commercial if it is held by a single member LLC? Can I still get a conventional loan? If not, what can I expect for rates?

[Will Fraser]

Hi @Waleep Alvi, if the buyer is an LLC then a conventional loan is not possible. You'll look at a commercial loan for that (currently rates anywhere between 4.25%-6.75% for a 15-30 year amortization) or hard money (rates currently between 8% - FirstBornChild%, usually interest only for 4-18 months).

IF you buy it in your personal name, you'll be able to refinance it onto a conventional loan after repair (assuming you are otherwise qualified for the loan). So, that may be an option to consider.