How to develop credit for a new LLC to start getting better financing

[John Nicholas]

Wondering if this strategy would help. I currently have cash to buy some properties but am try to figure out the best way to start to develop credit for a new LLC. First would a lender fund a new LLC if they put 70 to 80% down?

My thought is to purchase a few homes, putting down as much as I have to get get any type of loan for a news LLC, then pay down the small balance over time to build a credit history so I can eventually get a loan with 25% down or HLOC the paid homes to get in to additional properties?

Any thought or idea's if this is possible would be appreciated.

Thanks 

[Rod F.]

John,

My experience with the LLC loans is I have to sign a personal guarantee on every loan with LLC. Having a 30% equity of the rehabbed Actual Market value Has been plenty for me. I have been dealing with 5 different banks, some more receptive than others.

I haven't actually used any cash in the down payment loan side of the equation. We buy foreclosures, rehab , and hold for rentals. My equity's after purchase and rehab (rehab was financed also). is between a 30 and 40% equity. Currently we have about 40 properties in 3 different LLC"S. I'm now opening different credit cards in each of those llc's building a credit report for each. I hope to drop personal guarantees in the future.

My suggestion is talk to the lenders , more than one. and ask them what is their requirement's. you might be able to buy multiples with your money.  And you will find a significant difference in interest rates.

I have not went back and borrowed any of our equity's.(Heloc)  It does sound like a way to get more houses bought. So far I haven't needed the extra help to get the loans.

I did get a Heloc on my personal house for a while. to purchase a new home for the family.

both houses are now 30 yr. mortgages. while interest was low.  old house is a rental.

mostly 15 -20 yr. amortization loans, were 9 years into it now.

Hope that helps you in some way.

              "There's always another angle you just have to look deep for it."

                                                 It's the art of the deal!!

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