Best way for financing

[Dynomac]

Ok, I will worry about the business credit later after I have an  LLC setup.  Can I still invest in prop if I don't have an LLC?  If not would it be in my personal name?  I heard you weren't suppossed to put things in your personal name in case something happens they can seize personal assets.

Is a bank loan the same as a hard money loan?

You said I would pay a lower LTV if I get a personal guarantee on the loan- what does that mean and would you recommend it?

[thailanddave]

An LLC is a Limited Liability Corporation. You do it so if you get sued for something regarding the property, the liability ends there. They can't come after the rest of your assets.

You form the LLC and the LLC owns the property. You take a loan out in the name of the LLC but you guarantee it yourself. Even though you have limited your liability in a lawsuit, the bank doesn't want to get left holding the bag in the event of a default. They come after you because you have guaranteed the loan. Your LLC has no assets other than the house for them to take but they know if you think they will ruin your credit and attach liens to your other assets, you will make your best efforts to pay the loan instead of letting it go to default.

Once your LLC has a track record (credit history) and some assets, you will be able to take more loans in the name of the LLC without guaranteeing the loans personally.

An LTV stands for Loan-to-value. With a 640 credit score, you can qualify for no money down financing. (100% LTV). if you go to a hard money lender, they will typically want you to make a down payment of 35% or more. The lenders whether it be a hard money lender or a bank or mortgage company wants some assurance you wont just walk out when the going gets tough. If you have made a down payment, you have some skin in the game and will try to sell the property without losing your down payment.

A lot of people think banks want to foreclose on property to get them cheap and resell them at a profit. Thats not correct. A bank makes money by lending money and getting it back with interest one month at a time. They are not in the real estate game. They are in the money game. All they really want is their money back with interest. They hate foreclosures and REO's (Real Estate Owned). They usually lose money when it happens. I have been in foreclosures where people pulled all the copper wiring out of the walls and sold it to scrap dealers because they were pissed they lost their house.

[rbaxter]

There are many lenders who will do 100% financing for you with that credit score.

[richmortgagebroker]

Ok, I will worry about the business credit later after I have an  LLC setup.  Can I still invest in prop if I don't have an LLC?  

Yes, That is a good way to start investing is going about it with a personal guarantee and most lenders can get you qualified EASIER and FASTER.

JUST DO IT AND GET STARTED


If not would it be in my personal name?


Yes it would be in your personal name and who cares when the deal is right and you have calucated your risk it is a  FANTASTIC way to LEVERAGE OPM to MAKE MONEY


 I heard you weren't suppossed to put things in your personal name in case something happens they can seize personal assets.

The only personal asset that they can SEIZE is the HOME OR INCOME PROPERTY ( unless you commit FRAUD than that is a whole other topic)

Is a bank loan the same as a hard money loan?

A BANK LOAN is getting money from a bank that is federally charted or FDIC insured (that is why you do not want to commit fraud against them because it is treated the same if you ROBBED a Teller at the bank)

Hard money Loans is done by a private bank or individuals or corporations that have money to lend that are out side of the NORM. ( thay have their own set of rules and are not required to follow the same rules as federally charted banks

You said I would pay a lower LTV if I get a personal guarantee on the loan- what does that mean and would you recommend it?

Yes you can get a higher LTV going with a bank loan and that is have access to TRILLIONS of OPM

YES and so would Recommend it and so would most of the investors in this forum.