All Forum Posts by: Kevin S.

You are right.  That's the reason for me posting questions here.  Thanks.

Garret Sutton's book is the reason I am looking to create the LLC. I do appreciate your in depth response. Thank you.

Quote from @Devin Peterson:

Quote from @Kevin S.:

Hi everyone. Need some advice from lenders as well as experienced investors. I am getting ready to choose my lender from several I spoke to. Should I choose only one lender to qualify me or more than one? How will my credit be affected if more than one lender do hard credit check? Is it true that multiple lender can do hard check within 45 days without affecting my credit? If so, how many hard checks? Experienced investors, please share how you guys navigate this especially when you buy multiple properties in a year. I am looking to buy my first investment SFR property.

Also, how do I go about it when I have a freeze on my credit?  Can I unfreeze it only for few minutes or hour while lender do the check?  I haven't applied for any loan/mortgage since I put a freeze on my credit.  Don't know how it's done.  Thanks in advance.

 Kevin,

Definitely only stick with one lender. You will not want more than one person to have to pull your credit. It's okay to spend some time upfront shopping around for ideas but I would definitely recommend that you do not fill an app with more than a few, and DEFINITELY don't let them all pull your credit. Every time a hard inquiry is tracked it will raise more flags and questions for you in the long run. Your score will be affected just slightly, but enough for the end lender to trace back and possibly condition for all of these credit pulls with other institutions. You cannot have a freeze on any accounts when your file is into underwriting. Most DSCR investment lender will want a fill tri bureau credit check so they need access to all of your scores. Finally, if you haven't already found out by now - DSCR loans will be the type of loan program you will want to be preapproved for. There are no income checks, DTI, taxes, or W2s involved. This is the best product for investors that allows for the easiest preapproval and underwriting process. Happy to connect and help answer any more questions. Good luck!

 Thank you Devin for your response.  I see that you are a broker rather than lender.  I raised the question of broker vs lender to my lender : "tell me why should I choose lender and not a broker".  

He (of course) told me it's better to go with lender directly because there is no third party to deal with, things go faster, they know what products they have, they have all products suited for all type of investors, they have the ability to tweak underwriting since they are the lenders, less cost to me since only lender fee involved vs broker fees plus lender fees, so on and so forth. Since you are a broker would you dispute that?  TIA.

Quote from @Chris Seveney:

@Kevin Si

As

Others mentioned skip the LLC and save money and just keep it in your name . The LLC is one of the most overused and misunderstood things in real estate

It's supposed to act as completely separate from you. Look at it another way, would anyone else buy a house and give it to you for free and pay the mortgage (that is what you are doing when you give your LLC a home)? Since I think we can all agree on the answer as no - a court would not look at that as an arms length transaction and thus give you zero asset protection (note not a lawyer just someone with some common sense)

Thanks Chris. Is there not even one (or two) reason to own it under LLC? If there is, what would that one (or two) reasons be? Trying to figure out if one those reason(s) apply to me.

I have seen comments from both sides, for and against LLC. Hoping to hear from investors who had LLC and lost in court as well as successfully defend lawsuits because of LLC. And hear from investors who did not have LLC and were still able to defend against lawsuit as well as lost in court because of not having LLC. Any one of the above who were for or against LLC and had to change their strategy 'after' a lawsuit. By lawsuit I meant major lawsuit, not minor slip and fall settlements. Thanks.

Quote from @Devin Peterson:

Quote from @Kevin S.:

Hi everyone, I am about to create my first (Florida) LLC. My first investment property will be a SFR and loan will be on my name only (income reason). I was told by one lender that the property has to close on my name and transfer to LLC 'after' the closing. In order for the loan not to be called out the LLC has to have me as majority interest. What does that mean? My spouse will be minority interest? Not sure how my spouse will look at it. How do I go about it? Appreciate any advice I can get. Thanks.

You dont NEED an LLC perse, if you are using a full business purpose lender that will not close in the personal name, then that specific lender will have whats called an overlay and closing in the LLC / business name is one of those requirements. There are other DSCR lenders out there that do not mandate that you close under the business name. I will say that the one reason most people want to close under the business name is that a good chunk of DSCR lenders will not report this debt to personal credit. Which means, since its under the name of the business - next time your credit is run the next lender will not see or ask about the debt.

Thanks for your response Devin.  I forgot to mention that the loan is suppose to be a conventional loan not DSCR.  What is an overlay?  Since I am a new investor neither was I aware of DSCR-credit effect nor is that my intention of closing under LLC.  I am trying to find out why one lender told me to close under personal name and transfer to LLC after closing and another told me I can close under LLC.  Both lenders know I will be applying for conventional loan. The lender who told me to transfer 'after' closing also informed me that the LLC should have me as a majority interest or else the loan can be called out.  Since I am married and will have my spouse on the LLC does it mean my spouse will be minority interest in order to satisfy the previous lender's requirement of majority interest? (Loan will be under my name only because of income reason) I am new and still learning from members here.  Thanks. 

Quote from @Greg Scott:

Who told you that you needed to have an LLC if you own a rent property?

Is there no reason at all to have investment property under LLC?

Hi everyone, I am about to create my first (Florida) LLC. My first investment property will be a SFR and loan will be on my name only (income reason). I was told by one lender that the property has to close on my name and transfer to LLC 'after' the closing. In order for the loan not to be called out the LLC has to have me as majority interest. What does that mean? My spouse will be minority interest? Not sure how my spouse will look at it. How do I go about it? Appreciate any advice I can get. Thanks.

Hi everyone. Need some advice from lenders as well as experienced investors. I am getting ready to choose my lender from several I spoke to. Should I choose only one lender to qualify me or more than one? How will my credit be affected if more than one lender do hard credit check? Is it true that multiple lender can do hard check within 45 days without affecting my credit? If so, how many hard checks? Experienced investors, please share how you guys navigate this especially when you buy multiple properties in a year. I am looking to buy my first investment SFR property.

Also, how do I go about it when I have a freeze on my credit?  Can I unfreeze it only for few minutes or hour while lender do the check?  I haven't applied for any loan/mortgage since I put a freeze on my credit.  Don't know how it's done.  Thanks in advance.

Hi Kristen, Have you or your clients actually used this lender or did you just come across them online?  Other lenders require 20-25% down.  What's the catch here?  I tried calling and was only able to leave a message.  Any members here on BP has experience with this lender please share.  Thanks.

Thanks Jake.  Advice taken.  Do I keep 2 accountants, the regular accountant for my small business and a RE accountant as well?  For those who have small business and are RE investors, please chime in.  Thanks.