How to get a mortgage with a group of people? (LLC?)

[Josh Lyons]

Hi everyone, 

Two friends and I plan to flip a house. Our plan is to use a mortgage. To do so, should we set up an LLC? Or, is another type of entity or partnership agreement a better way to go? I've read that LLCs can have limited options in obtaining mortgages and good rates. In other words, how should a small group of people pool their money and set up a legal agreement (entity) in order to obtain a mortgage and buy a house to flip?

Thanks! Josh 

[Greg Dickerson]

@Josh Lyons Yes you want to use an LLC to hold title to the property. You can all be the members.

All you need is a short term interest only loan. No need for a mortgage if you're flipping. 

Best bet for financing is to talk to a bunch of local commercial banks and get a loan in the name of the LLC with you as loan guarantors. They all have different terms and rates so you need to shop around.