How do I get a loan to buy multi family or mixed us property’s under a brand new LLC
Hi everyone 
I want to create an LLC and get a loan to buy multifamily units to rent.( or maybe even mixed use) Basically start a Real estate investment LLC. What’s the best way to finance this? I have about 40K in capital but nothing else I can use or a barrow off of. I heard that banks will lend on the property’s return and not off of your personal income( not a lot for me) so is there some way to get a small business loan of some sort? Or a secured mortgage? Who specifically if anyone will lend money to start something brand new like this? Also I would like to avoid personally guaranteeing the loan if possible. Also probably no hard money lenders
Thanks a million!
[{"id": "gqo664j", "text": "I don't know how you are going to do this.  You are expecting a financial institution to trust that you are a good risk with their money with no experience in renting properties.  Without that history they will want you to personally guarantee the loan so you will have to have the credit score and personal income to guarantee it with.  Most will not count the rental income without some proven history of your ability to manage your rentals.", "replies": [], "depth": 1}, {"id": "gqoa8e3", "text": "Just check out riverbend lending. You need 30% down but they only care about the properties income and not personal income.", "replies": [], "depth": 1}, {"id": "gqog54y", "text": "What you are looking for is called a non-recourse loan. Although I think your lack of experience may be a problem in obtaining one.", "replies": [{"id": "gqoqfbb", "text": "There is some downpayment amount at which a lender is going to take a chance.  Especially if he has a professional property management team.", "replies": [{"id": "gqosaor", "text": "I am in this position now. No history of ownership but a CRE professional. With GP LP money and a professional property manager what does the process look like?", "replies": [{"id": "gqotuug", "text": "You'll have to find a mortgage broker (not a direct lender) and ask them.  They'll shop dozens if not hundreds of lenders to see what deal they can get you.  At some point it is just a matter of percentage down payment.  If the property is cashflowing, they have little risk with enough downpayment. Generally around 30% is where non-recourse funding starts.", "replies": [{"id": "gqovk0w", "text": "Good point lol \ud83d\ude02 thanks", "replies": [], "depth": 5}, {"id": "gx8odxb", "text": "You sound like a bridge lender... =) (also a bridge lender)", "replies": [{"id": "h1jfejo", "text": "lol I have done some bridge lending in the past, but right now I have my plate full and actually obtaining funding myself for new construction housing on some developed lots I have owned for far too long and need to do something while this house market is hot.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gqoohlf", "text": "If you are doing commercial deals (5 units+), yes LLC loans are the preferred route for most lenders. However as people have mentioned, banks will want to see some operating history on your end as far as owning and managing properties. \n\nIf you go with a bank loan, they might also want personal recourse and look to your own level of capital beyond what\u2019s in the LLC. \n\nIf you go with an agency loan (freddie/Fannie) you can typically get a non-recourse loan, but again you\u2019ll need to have some operating experience generally.\n\nCommercial real estate might be hard to break into with only $40k and no experience. However, if you are in a part of the country where apartments sell for $30-40k per unit, you might be able to squeak a loan out. \n\nAnother thing to consider would be the initial loan closing costs, that can run five to $15,000. Lenders will also want to see an initial reserve, often a few months of rent, and I know that Freddie and Fannie were both requiring a 12 month Covid Reserve on a lot of loans recently closed as well.\n\nSo if you only have 40 grand, I feel like a good portion of that would get eaten up with closing costs, and then also the initial reserves. It would leave you with like $10,000 for an equity allocation of purchase.", "replies": [], "depth": 1}, {"id": "gqoww8h", "text": "You have a lot of reading and learning to do. This is a fairly basic question that you should already know the answer to before getting into a commercial, multi unit deal.\n\nOne book I recently finished that I found helpful in this area is *Raising Capital for Real Estate*. Get a copy and read it. Then get a copy of some of the books it recommends and read those.", "replies": [], "depth": 1}, {"id": "graqsgj", "text": "i think my lender can help you out let me know if you are interested", "replies": [{"id": "gratkz2", "text": "Absolutely!", "replies": [{"id": "grau36c", "text": "Can you send me private message so we can talk more", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]