Acquiring Investment properties is a proven method for attaining wealth but you will need to get educated on Rental Property Loans. You can get this type of loan directly in your name thru a Bank or you can set up an LLC, Corp or Trust and get the loan to that entity. The best option is if you have just a few properties or just getting started, then get the loans in your name. If you have now or plan to have more than 5-6 then spend the time to get an LLC set up.
When you get the Investment property loans into your LLC, they do not show up on your credit. This will help you not run into DTI- Debt to Income issues later. Rental Property Loans to your LLC make the most sense as any future liability from the property would be limited to the assets in that LLC only.
You will be required to file a separate LLC tax return but also get to expense items associated with the properties. Our Private Equity Fund ONLY lends to LLC’s for non owner occupied properties. Flips & Rentals fall into this category.
Most Investors buy their Investment property using our Private Money fund. They get additional funding to Rehab to property to maximize the value of the property. Once rehabbed, it might be a good idea to Lease the property. This usually results in some positive cash flow but as you make the monthly payments from the rent received you are paying down the loan.
Expect a refinance of an Investment property to go to 75% of the after rehabbed Value. If that is more than you owe, then you can get cash out. Many times the cash out is all or more of what you originally invested cash to close on the purchase loan.