All Forum Posts by: Timothy Finley

Thank you to everyone who responded. This is very helpful. I'll look into it further and keep you updated.

Thanks for the responses. Very helpful. To clarify a few things,
I (as well as my family members who would be investing with me) do have a significant amount of personal assets we'd want to protect, hence my concern about liability exposure. We're planning on investing in a multi-unit property (likely 3-4 units).

I've spoken to residential lenders and obtaining a residential mortgage should be a problem; however, I have yet to speak to a commercial lender.

As far as going with a residential mortgage under my name, then transferring into an LLC, I've read that that could reset certain loan terms as well as trigger transfer taxes. Are these valid concerns? Thanks

Hi, a family member and I are considering investing in our first investment property. I've read that forming an LLC to purchase the property is a good way to protect ourselves from liability. However, I also understand that obtaining financing for an LLC is often difficult (especially if there are no pre-existing assets or income streams). I'm told that we'd have to obtain a commercial mortgage which often requires higher down payments (up to 35%) and higher interest rates. We'd also have to personally guarantee the loan, which I could understand. I was also told that the most important protection from personal liability will be the insurance I purchase. The LLC will add another layer of protection, but the insurance will be the most important.

My question is this: Is it worth setting up an LLC and having to deal with higher financing costs, or do most investors purchase investment properties using residential mortgages and rely on insurance to protect themselves from liability? Any input would be much appreciated.

Hello, my name is Tim Finley. I'm a new BP member from Philadelphia, PA. I currently have a full-time job that's not in real estate, but I'm looking to begin investing in multi-unit investment properties for buy and hold purposes. Excited to participate in Bigger Pockets!