| Posted by: Timbo Jan 15 2003, 07:35 PM |
I have found a 4 unit rental building that I want to purchase. Numbers look respectable and is priced fairly. I can get a good loan if I apply personally. However, I want the liability protection of an s-corporation or LLC. I have asked several mortgage brokers about lending the money to my corporation to buy the property but none will do it. I thought I would just transfer the down payment amount to my corp and then apply for the mortgage as a corp and be on my way. I see many owners of investment properties that are Inc's or LLC's so I assume it can be done.
How can I let the corp buy the property and apply for the mortgage?? Are there institutions that will loan new companies money to buy positive cash flow properties?? What am I missing here??? Or..do I buy the property and then quit claim it to my corp??
Frustrated,
T. |
| Posted by: loanuniverse Jan 15 2003, 08:50 PM |
Mortgage brokers usually deal in residential property financing and are not the ideal source for an income property loan. A four unit building still qualifies for primary-residence financing as long as you are going to use one of the units as your home. I am almost certain that this is the case, but since residential lending is not my business do not quote me .
If someone can get you long-term financing on this property at today’s very low fixed rates (talking about 5% for 15 years or 6% for 30 years) I would go for it and cover the liability with an insurance policy. In addition, residential financing has more borrower friendly requirements such as the length of financing so you won’t need to refinance any time soon.
If you still want to create a holding company, you will have to go with a rental property loan like the one I talk about on http://www.loanuniverse.com/rental.html. Just remember that the down payment will be at least 20% and the term of the loan might only be 5 years requiring another loan and additional fees when the first one matures. |
|
|
