Financing is currently a challenging issue for investors with several properties (generally more than 4). The issue is that the lending institutions view someone with several properties as an increased risk.
When you are qualifying for a new loan to purchase your next investment property, the prior investment property loans show up on that credit report. Depending on the lender, they may decide not to loan you any more money.
One of the strategies currently being used to address this issue is to deed your properties over to an LLC and then seek commercial financing for those investment properties.
The investment real estate now deeded to separate entity and financed through a commercial lender shouldn’t show up on your personal credit report. This helps to free up your personal credit report, potentially making it easier to get financing on your next great real estate investment purchase.
Your investment real estate should already be held in a LLC for purposes of liability. But before implementing this strategy you should contact your professional advisors (residential and commercial mortgage brokers, real estate attorney, etc) to research this strategy for your specific situation and develop a plan to move forward if it is determined to be feasible.
Onward.
Posted by SHANE CARR 