Lender for SFH rental?

If you want 30 year fixed/amortizing loan without having to give blood samples, shoot me an email.

Pros: low doc loans. Application, liquidity verification and appraisal. No tax returns needed etc. also will not go on your personal credit bureau

Cons: rate is going to be 6.75 to 7.25% depending on credit score. It’s a 30 year fixed rate and 30 year amort but you’re paying a little more to get those pro’s above

Lnobles@redstickcapital.com

Yes. It’s commercial but a few lenders let you create a new LLC or keep it in your personal name. But either way it doesn’t hit your credit. I would strongly suggest creating a new LLC to purchase something in. Loan is in the llc’s name and then you just personally guaranty it.

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So the main reason to choose a commercial loan with a higher rate would be to get the protection of an llc, right?

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Yes, and so that it doens't go on your personal credit report. Also, if you just go into a local community bank, 9 times out of 10 they will portfolio it and then you'll be looking at a 5 year loan and a 20 year amortization. This will def be the route if you go to a local bank and put the loan in an LLC.

The only way you will truly get a 30 year mortgage in the mid-5's is if you put it in your personal name and finance it on the secondary market like you would your personal residence. Sometimes you can transfer ownership into an LLC after the closing, but it's still on your credit report. Some people care that it's there, some people don't. But with it being there, it's def going to count towards your DTI.

Due to the current market, many investors will allow you to close residential loans in an LLC or you can lump the properties into one loan. You could even possibly qualify on cash flow from the rentals. Eustis wont have this product. Reach out username@gmail.com and I have a couple of ways to structure it. I am local in Baton Rouge

Don’t disagree.

Fees on these are typically 1-2 points and 6.5-7.5%.

BUT, if you want to fill out an app, order an appraisal and give a couple of months bank statements and call it a day vs having to fill out a PFS, submit 3 years of tax returns, get asked a lot of questions etc then it’s the way to go.

It also depends on a lot of other factors as well. How long do you want to keep the property, do you expect rates to be higher in 5 years when the loan matures at the bank, do you have some credit blemishes, do you have an already high DTI, are you showing business losses on the tax returns, along with some other stuff.

It’s definitely not an apples to apples comparison, zero doubt. But everyone’s situation is different and I tell everyone bank debt is definitely cheaper, no doubt. But it all depends on the situation. All I can do is law out the pros and cons of each and let the person then decide.