Company creation for investing

[Raphaël C.]

Hi guys,

I was wondering if it is better to create a company before stating investing in real estate. What it is the best?

Thanks,

Rafa

[Greg Dickerson]

Originally posted by @J Scott:

Originally posted by @Greg Dickerson:

Originally posted by @Raphaël C.:

Hi guys,

I was wondering if it is better to create a company before stating investing in real estate. What it is the best?

Thanks,

Rafa

Yes you definitely want to operate as a corporation. Whether LLC or subchapter S is a discussion for you and your accountant and attorney. depending on your strategy and operating structure you may even want to place each individual property in a separate LLC

Depending on your source of financing, this may not be the case. Some lenders and lending institutions will not lend to a business entity.

I have never had a problem getting a loan for any of my companies or in the name of my company. As long as you have good credit and solid financials you can get a loan in the name of an LLC or your business. The banks do not care about what name the loan is in, they care about who the guarantor is. Once your business establishes credit you can guarantee the loan in the name of the business. 

For commercial and multifamily type lenders will not lend to you personally they will require you to set up an LLC as to keep the asset separate from your personal activities and also makes foreclosure easier in the event of default.

All that being said keep in mind every lender is different and have different appetites, requirements, guidelines, rates and terms. Local Commerial banks will also be very different than conventional lenders.