Hey guys-
Brand new to the site and really enjoying it so far! My business partner and I have been investing in real estate for about 2 years now and we're looking to take it to the next level but need some advice. Here's our situation:
We have purchased 2 single-family properties in the Dallas area that are currently rented out and producing income. We paid cash for both of them (they are valued between $55k and $65k) so we own them outright. Now that we have the experience and understanding of what it takes to acquire these types of properties, we'd like to use financing to purchase some new ones. However, as we've looked to lenders we have run into a couple of problems:
1. The size of these deals is too small. Most lenders don't want to loan us less than $50k (after down payment). This is not a huge problem as we'd be happy to purchase more expensive properties as long we can make the numbers work. In fact, we would prefer multifamily units. It will require learning about a new segment of the market, but that is fine and something we would welcome.
2. We own our other properties under LLCs. Lenders have expressed a willingness to loan us money as individuals for a mortgage loan, but not to our companies. Even though the companies have been generating income for 1-2 years we can't seem to get around this.
My questions for the group are, do any of you have experience with a similar situation? Is there any way for us to pull money out of our existing properties, preferably through a mortgage loan, or alternatively through a business loan secured by the business assets (i.e. the properties)? If not, what other approaches should we explore? Other kinds of business loans? Having one of us borrow and buy as an individual and then transfer the property into the LLC?
It seems strange that we have well over $100k in income-producing assets yet can't easily take money out of them.
I look forward to your feedback!
