Why do lenders make this so complicated? - Posted by Ben Miller

Posted by Lou on December 01, 2007 at 19:05:30:

you are in luck. i happen to be licensed in GA and work with lenders that will let you hold title in your LLC or trust. I will email you next week to discuss.

Why do lenders make this so complicated? - Posted by Ben Miller

Posted by Ben Miller on November 30, 2007 at 18:14:46:

I have put a signifigant amount of time and effort into forming my LLC and obtaining numerous BLOC. I have obtained these BLOC b/c as you all know that a successful REI needs to be able to act quickly when a deal arises and show strong offers in the form of cash. I was going to use the BLOC to purchases properties in my LLC’s name, but since this is my working capital I do not want to keep it tied up in one or two houses…I have to keep moving to the next deal.

HERE IS THE PROBLEM: When I go to put a mortgage on the property and free up my working capital my lender says that they will not lend money in my LLC’s name, even with a personal guarantee. Therefore this forces me to put title into my name (leaving me personally exposed) in order to get the mortgage. At that point I would then want to deed into a land trust with my LLC as beneficiary. Wow, this seems like a lot of extra work and money, plus the lender is forcing me to go behind their back to do this, which ethically, I do not like doing! Oh, and one more thing, I am trying to run my REI business as just that…a BUSINESS. All this swithing title back and forth makes it complicated to keep my books flowing the way I want to.

HERE IS MY QUESTIONS: What am I doing wrong here…there must be an easier way? Does anyone know of any lenders that will lend to my LLC if I give a personal guarantee?

Any advice is appreciated.

Re: Why do lenders make this so complicated? - Posted by Ben Carmona

Posted by Ben Carmona on December 01, 2007 at 22:51:38:

The issue is really 2 fold.

You want a loan in the LLC name


you want title in the name of the LLC.

This is not something wholesale lenders that mortgage brokers use offer. It would be considered a commercial loan. 2 options:

  1. Either get a commercial loan through a brick and mortar bank in the neighborhood where the property is located


  1. Use a commercial lender that offers loans on residential investment properties. Not many of these. The one I know of will only do refinances. They have a 12 month seasoning guideline which can be waived if the property you are refinancing is owned free and clear (no liens) and the previous owner was on title for 18 months. So if you purchased a property with cash or available bloc it would be owned free and clear. If REO then you just need to know if the person who owned before was on title for at least 18 months.

If you can live with title just being done in your LLCs name with the loan in your personal name then several other options exist. One lender does as full doc and a couple others that can do with reduced doc benefits.

Ben Carmona

Re: Why do lenders make this so complicated? - Posted by Lou

Posted by Lou on December 01, 2007 at 17:12:01:

What state are you in?

Actually VERY Simple - Posted by Jimmy

Posted by Jimmy on December 01, 2007 at 06:03:36:

a BUSINESS, huh??

then apply for a business loan, and not a home mortgage loan. banks make loans to entities all day long, but not HML’s.

if you want the 30 year am and the preferential terms of an HML, your bank is going to adhere ot the underwriting guidelines of FNMA or FMAC. and there’s the roadblock.

you could try to talk to a small local bank who holds their loans (and does not sell them into the secondary market). so called “portfolio lenders” might be willing to go 30 years with you. but once they sense that you are a BUSINESS, be prepared for them to tell you to talk to the BUSINESS bankers.

Re: Why do lenders make this so complicated? - Posted by Max-Va

Posted by Max-Va on November 30, 2007 at 18:29:44:

Most residential mortgage lenders will not loan to the LLC. You need to talk to a commercial lender or your local bank about a commercial loan. They have no problem with LLC’s

Re: Why do lenders make this so complicated? - Posted by Ben Miller

Posted by Ben Miller on December 01, 2007 at 18:31:21:

I am located in Georgia.