Answers · Investing
Can I buy an investment property in an LLC?
Yes. Most investor loans, including DSCR, fix and flip, bridge and construction loans, are built to close in an LLC. Expect to personally guarantee the loan, and expect the lender to ask for your entity documents. Conventional loans are the exception: those close in your own name.
Written by Andrew Malm, Senior Loan Originator, NMLS# 2663426. Last reviewed .
Investor lenders like LLCs because the loan is for a business purpose, and an entity makes that clear. You will need the paperwork that proves the LLC exists and that you can sign for it: articles of organization, an operating agreement, an EIN, and proof the entity is in good standing.
The LLC does not replace you. On most loans the members with a meaningful ownership share sign a personal guarantee, and the lender still checks their credit. The entity holds title. You still stand behind the debt.
If you already own a rental in your own name with a conventional loan, think before you move it into an LLC. Most mortgages have a clause that lets the lender call the loan if title transfers. Some lenders allow the move and some do not. Ask before you record a deed.
I am a loan originator, not an attorney or a tax advisor. Whether an LLC is right for you, and where to form it, is a question for them. My part is telling you what the lender will need once you decide.
What I'd do
- Form the LLC before you write the offer, so the contract and the loan match.
- Keep the operating agreement simple and current. Lenders read it.
- Tell me every member and their ownership share up front.
- Talk to an attorney and a tax advisor about structure. Then call me about the loan.
Have a situation that does not fit the article? That is most situations. See your options or text me at 763-373-9360.
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