What is the best way to approach getting a commercial real estate loan under LLC with no credit history?
There is a commercial property in my town that I would like to purchase and have owned by my LLC. My LLC does not have business credit history nor high enough cash flow on the books to get accepted for a loan. However, personally,  I have a very high credit score as well as the cash on hand to put a nice size down payment. How can I go about having ownership through the LLC, but using personal financials to potentially obtain the loan?
[{"id": "hb9rks2", "text": "The mortgage will be qualified based on the debt service coverage ratio of the property. That is, the lender will expect the income generated by renting the property to cover the debt service plus a cushion (in case of vacancy, etc.)\n\nYour personal qualification requirements will be primarily around net worth, property management experience, etc.", "replies": [{"id": "hbc42yp", "text": "Adding to this, if recourse - expect a global DS requirement of 1.25+ which includes personal income added to property income. Still unclear if this is owner occupied or if there is already a lease in-place.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hb9rpge", "text": "More than likely you\u2019ll just be the guarantor. Talk with your bank. \n\nMany use LLC\u2019s and some use a separate LLC for each project. Bank should be familiar with how to go about it.", "replies": [{"id": "hbbj42s", "text": "In nearly every deal I broker the buyer will set up a new LLC to hold the property. Those LLCs obviously don't have any assets or credit history. The bank is lending on the property and you. You'll need to guarantee the loan most likely, at least partially, but as long as the income can pay for the note plus some breathing room they should be fine with it. Typically a bank wants ~1.25x DSCR meaning the net income needs to be &gt;1.25x of the debt service.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hb9zi52", "text": "YOu need to have decent credit, tax filing, and downpayment available.,", "replies": [], "depth": 1}, {"id": "hbazboh", "text": "1) is this intended as an owner occupied property or strictly rental income?\n2) when you say your LLC doesn't have high enough cash flow are you including any lease income from the new property or add backs like rent reduced elsewhere or your salary (on a combined basis could you live and service the debt)\n3) start with wherever your LLC currently banks but doesn't hesitate to shop it.  Everyone is going to ask you for the same few things; 2-3 years personal and business tax returns, a personal financial statement, rent roll or projections on the property being purchased.", "replies": [], "depth": 1}, {"id": "hbb1kea", "text": "If you don\u2019t have a lender lined up, the broker on the deal may have suggested lender contacts that finance these types of properties in the area\u2026typically a local bank or credit union. Mortgage brokers can sometimes be helpful as well. The bank will underwrite the property and focus on the debt service coverage of the forecasted financials- they typically want~1.25x coverage. The bank will also require you to personally guarantee the loan which is where having high personal income is nice, but the property will still need to pencil on its own. There are also bridge debt financiers who charge higher rates and don\u2019t always require guarantees, but the maturity is very short (1-3yrs) so you want to be confident in the refi potentially of the property.", "replies": [], "depth": 1}, {"id": "hbbzvq0", "text": "You definitely do not understand what the purpose and function of an LLC is. It\u2019s a hypothetical bucket you put an asset into so that your other assets aren\u2019t liable for legal claims brought against it if the asset gets sued or fails to abide by the terms of it\u2019s mortgage(I.e. make payments)\u2026in a nutshell (pun intended).", "replies": [{"id": "hbc41xf", "text": "Gotta start learning somewhere", "replies": [{"id": "hbh53ie", "text": "Yes. I respect your search for knowledge! You should get a better lawyer. They should\u2019ve explained it when they set it up for you!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hbc1pkm", "text": "How do you shop rates on the these loans?  Whats a good rate?", "replies": [], "depth": 1}, {"id": "hbce1vp", "text": "FHA loan or hard money. I can help you with it.", "replies": [], "depth": 1}, {"id": "hbdxqq4", "text": "**The borrower for most CRE loans is a single asset entity (LLC, LP, etc) created for the sole purpose of owning the property that will secure the loan**. Not only is this totally normal, but this is how the majority of CRE loans are structured. You will be asked to provide your personal financial statements to prove your financial wherewithal even if the loan is non-recourse.", "replies": [{"id": "hbt20xc", "text": "What about using a trust vs llc? Any benefits to a trust vs llc I\u2019m curious. as I\u2019ve seen some buy under trust. I know privacy is one but I wonder what else", "replies": [{"id": "hbts89b", "text": "From my experience, CRE held in trusts are exclusively family held by aging parents with more than one adult child that will eventually inherit the CRE asset. The CRE assets I\u2019ve encountered  owned by a trust are less than $5 million.", "replies": [], "depth": 3}, {"id": "hiycmtd", "text": "Doesn't really matter. It makes succession easier. We just make the trust guarantee the loan.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hcq2l55", "text": "FHA loan has no net worth or liquidity requirements. 35 years fixed, 2.8% interest rate, 80% LTV, non recourse. Easy", "replies": [], "depth": 1}]