Using LLC to Finance Deals

[Cyle Harris]

I financed my first fix and flip by taking out personal loans and using my own cash. Going forward, I'd like to begin using my LLC for financing deals (i.e. hard money loans, etc) to keep all of my personal and business expenses separate and to leverage some of the benefits of simply using an LLC.

Does anyone have any experience using their LLC to finance deals? If so, can you share details on how you got started and how you secured your first loan using your LLC?

[Stephanie P.]

@Cyle Harris

Different point of view here.  

Overwhelmingly, borrowers who use conventional money first, are able to scale their businesses and profit more because the money is simply cheaper.  We always recommend borrowers exhaust their conventional options first before taking any of our type loans.  It's in the borrower's best interest.

If you go the hard money route, you may need an LLC. That doesn't mean your LLC has to borrow the long term money.

Here's a good route to take. Acquire the property with hard money. If you have to use an LLC, use it. Then refinance into a conventional loan and keep the property. If you're concerned about liability, get an umbrella liability policy. If you're the sole member of the LLC, you'll be able to refinance (if income and credit qualify)

Stephanie