Why close in an LLC?
The primary reason investors use LLCs is liability protection. If a tenant sues you, if someone is injured on the property, or if the investment goes sideways, an LLC creates a legal barrier between the investment and your personal assets. Without an LLC, a judgment against the property could attach to your personal bank accounts, home equity, or other assets.
Beyond liability, LLCs offer:
- Tax flexibility — single-member LLCs are pass-through entities by default; can elect S-corp or C-corp taxation if beneficial
- Portfolio organization — separate LLCs for separate properties keep accounting clean and limit cross-liability
- Privacy — in many states, LLC ownership is less publicly visible than individual ownership
- Easier partnership structures — LLCs are the vehicle of choice for co-investment arrangements
Can you get a mortgage in an LLC?
Yes — with private lenders. Traditional banks and Fannie/Freddie backed lenders will not lend to LLCs for residential investment properties. Private lenders like Oak & Iron Lending lend to LLCs, corporations, partnerships, and trusts routinely. This is one of the core reasons experienced investors prefer private lending for investment property financing.
What you need to close in an LLC
- LLC formation documents — articles of organization filed with your state
- Operating agreement — internal document governing LLC operations and ownership
- EIN — federal tax ID for the LLC, obtained from the IRS free online
- Personal guarantee — most private lenders require a personal guarantee from the principal(s) of the LLC
With Oak & Iron Lending — no. We lend to LLCs and individuals on the same terms. The deal is evaluated the same way regardless of whether you close as an individual or through an entity. Set up your LLC before you need it — formation is inexpensive and the protection it provides is worth every dollar.
