Lenders who do LLC vesting

[Michael K.]

Hi everyone,

New investor in Cleveland and happy to be a part of this forum! Wanted to reach out and see if anyone has a recommendation for a lender that will do an LLC vesting on a SFH investment property. If so, I'd love to hear from you. Feel free to reach out and connect. Thanks!

Mike

[Matt Rutter]

First National Bank recently started this service. Personally, I haven't borrowed as a LLC before since it was unavailable when I've needed loans, but I've been very happy with my experience with them and my contact over there.

[Sean Dawson]

We used U.S. Bank for a Cleveland multifamily in our LLC

[Michael K.]

Hi @Matt Rutter and @Sean Dawson, thanks very much for the recommendations!  Much appreciated.  I'll look into their programs.  If either of you have a particular contact at those banks that you've worked with and would feel comfortable referring, feel free to shoot me a PM.  If not, that's totally fine.  This is super helpful.  Thank you!

[Abi Wegman]

Are the loans First National Bank and US Bank make to LLC's commercial loans?

[Michael K.]

@Abi Wegman - Hi, I spoke to someone at US Bank today. They told me the LLC loans are typically commercial loans, but that they do sometimes do LLC SFH loans as a portfolio product on an exception basis. They're going to get back to me with some more concrete guidelines. Happy to share when I have more info!

[Michael K.]

@Abi Wegman - Have not connected with First National yet

[Jad Boudiab]

Originally posted by @Michael K.:

@Abi Wegman - Hi, I spoke to someone at US Bank today. They told me the LLC loans are typically commercial loans, but that they do sometimes do LLC SFH loans as a portfolio product on an exception basis. They're going to get back to me with some more concrete guidelines. Happy to share when I have more info!

Like most banks, they want to see a track record. We've worked with US Bank in the past, out of town investor buying in Cleveland, and they only presented LLC loans on residential property after client had borrowed $400k+ from them on a commercial building. It would help if you have previous experience or other information to show for track record. Happy to connect you with my contact there.

[James Wise]

Originally posted by @Michael K.:

Hi everyone,

New investor in Cleveland and happy to be a part of this forum! Wanted to reach out and see if anyone has a recommendation for a lender that will do an LLC vesting on a SFH investment property. If so, I'd love to hear from you. Feel free to reach out and connect. Thanks!

Mike

Most will not. Reason is you would need to do a commercial loan to get them to loan to an LLC. Banks commercial departments do not generally want single family homes in their commercial portfolio.

[Michael K.]

@Jad Boudiab; @James Wise,  Thanks to you both for the info!  Much appreciated.  

James - that's been my experience as well that most banks won't do that. I've run across a few banks through brokers in some of my other transactions that would do LLC vesting for a SFH on a portfolio basis--usually with a .5% (ish) interest rate kicker. Their geographic scope was limited though.

Jad - I totally understand what you're saying.  I might reach out to you to talk more specifics.  I do have some other investments and a pretty decent track record as a landlord and borrower so I'd be interested in nailing down whether they have any hard and fast criteria on that.

Thanks again!  Really appreciate you sharing your perspectives!

Mike

[George Hoover]

Hi Michael,

I have read blogs where real estate attorneys suggest putting the loans in your personal name (to take advantage of the lower interest rate), then moving them into a land trust which is then purchased by your LLC. This is apparently totally legitimate/legal. It also won't trigger the call on transfer clause from the bank because moving into a land trust doesn't require a filing with the county.

The only drawback is that you will have to pay an attorney of course but it may be worth it.  Try searching BP blogs under land trusts.

All the best 

[Stephanie P.]

Originally posted by @Michael K.:

Hi everyone,

New investor in Cleveland and happy to be a part of this forum! Wanted to reach out and see if anyone has a recommendation for a lender that will do an LLC vesting on a SFH investment property. If so, I'd love to hear from you. Feel free to reach out and connect. Thanks!

Mike

 Hey Mike

There is a whole host of lenders that specialize in this vein of lending. It would be a portfolio loan, not Fannie or Freddie so the rates would be slightly higher, but lending to a new LLC for single family residential is out there.

We always suggest borrowers exhaust their conventional options first and then get into the commercial loans.  The money is cheaper.  If you feel uncomfortable with the liability, an umbrella liability policy is pretty cheap.  Best of luck

Stephanie

[Allison Mueller]

@Abi Wegman @Michael K. @Matt Rutter Hey All! 20/20 Real Estate is in the final process of solving this exact problem for investors across the country, who are looking to purchase SF turnkey assets and get a commercial loan with an LLC. If you would like additional info please send me a PM and I will get right back to you.

[Michael K.]

@Allison Mueller  Thanks Tal! Would love to hear more about it.  I'll reach out and connect with you.  Have a good week!

Mike

[Garrett May]

@George Hoover Thanks for the information about land trust. I need to look more into that.

[Stephen Leskovec]

Greetings all.  I'm brand new here and about to purchase my first rental home so take this with that in mind. 

I was researching some hard money lenders and LendingOne, a featured hard money lender on the BP site, told me they ONLY do business to business loans.