Bank wont allow my LLC to have a mortgage

[Michelle T.]

Hi All!

Looking for some guidance/advice please. I would like to purchase rentals. I've set up an LLC and then went to the bank to talk about my plan and see what finance options I have. The bank tells me they wont allow an LLC to have a mortgage and that the mortgage needs to be in my personal name... so I ask what is the point in having the LLC? then the business loan rep suggests perhaps the mortgage goes in my name but the rental agreement is with the LLC. Another suggestion was that I use a business loan instead of a mortgage. He is going to call some of his "friends" that are investors to see what they do and I thought I'd check in with you all to see what you think. Do I need to go to another bank? It is common for an LLC to own the rental properties and their mortgages right? or am I missing something...

Thanks!

[Wayne Brooks]

not eacactly.

IF you can get a loan with e LLC, it won't be conventional, it will be commercial, shorter terms, probably have to refinance in 5-7 years.

The whole "must buy in an LLC" is way over rated. How many landlords here have actually lost a law suit that wasn't covered by a decent amount ($1-2m) of insurance? I'll also bet the majority of single member/small LLC's used by landlords could be easily pierced anyway.