Most flips close in an LLC, and lenders expect it. What surprises new investors is the paperwork the entity needs and the fact that the owners still sign personally.
In short: Yes, LendingStreet finances fix and flip loans to LLCs, and it is the most common way investors hold flips. Expect to provide formation documents, an operating agreement, an EIN letter and proof the entity is in good standing. The loan is made to the LLC, but the owners typically sign personally, so there is personal recourse even though the entity is the borrower. Terms are the same as our other flip programs: up to 90% of purchase, up to 100% of rehab, rates from 9.99% for qualified borrowers.
Fix and flip loans are business-purpose loans on investment property. Lending to an entity makes that purpose clear and keeps the project separate from your personal finances.
An LLC also makes it easier to bring in partners, track each project's costs and transfer ownership on sale. Corporations and some other entity types can borrow too, though LLCs are by far the most common.
Have these ready before you go under contract. Missing or outdated entity paperwork is one of the most common reasons a flip closing slips.
Even when the LLC is the borrower, most flip programs require the main owners to sign personally. In plain terms, the lender can look to those individuals if the loan is not repaid. This is standard on short-term investment loans and is how the lender gets comfortable lending to a new entity with no history of its own.
Which owners must sign varies by program, and it is often tied to ownership percentage or control. The people who sign are also the ones whose credit, experience and liquidity are reviewed. Talk to your own attorney about what signing personally means for you.
A single-purpose entity is an LLC that owns one property or one project. Some investors form a new LLC for every flip to keep liabilities and books separate. Others run several flips through one investing LLC.
Either approach can work. Some programs prefer or require a single-purpose entity, especially on larger loans. A new LLC with no track record is fine, because the lender reviews the experience of the people behind it.
| Approach | Pros | Trade-offs |
|---|---|---|
| New LLC per flip | Clean separation, simple books per project | More filings, fees and paperwork |
| One investing LLC | Less paperwork, one set of documents | Projects share one entity |
| Partnership LLC per deal | Clear split of capital and profit | All signing members reviewed |
This example is illustrative and not a quote. Two partners form a new LLC, each owning 50%. The LLC buys a house for $300,000 with an $80,000 rehab budget.
At 90% of purchase, the purchase portion of the loan is $270,000. At 100% of rehab, the rehab holdback is $80,000. Total loan: $350,000. Cash needed at closing before closing costs is $30,000, the remaining 10% of the purchase price.
Because each partner owns half, both are likely to sign personally, and both have their credit and liquidity reviewed. One partner's flip experience can help the file even though the LLC itself is brand new.
If you plan to own the flip in an LLC, put the LLC on the purchase contract or assign the contract to it before closing. Buying in your personal name and deeding the property to an LLC afterward can conflict with the loan's terms and create title and insurance issues.
Make sure the LLC name on the contract, the title commitment, the insurance policy and the loan documents match exactly. Small mismatches cause real delays.
Along with the entity documents above, bring IDs for each signing member, bank statements for the LLC or members showing cash to close and carry, the purchase contract in the LLC's name and a line-item rehab budget.
Send it all at once and the financing team can review the scenario and come back with 2–3 options quickly.
Yes. A new LLC is common. The lender reviews the credit, experience and cash of the members behind it, not the entity's own history.
On most flip programs, yes. The main owners sign personally, which gives the lender personal recourse. Which members must sign varies by program.
It is a common choice, and some programs prefer single-purpose entities on larger loans. Others are fine with one investing LLC. Ask your own legal adviser what fits your situation.
Usually, yes, but the LLC may need to register to do business in the property's state. Confirm requirements with the title company or local counsel.
It is better to close in the LLC. Transferring after closing can conflict with the loan terms and create title and insurance problems.
Depending on the program, your loan is funded by LendingStreet or by one of our capital partners; your term sheet names the lender of record.
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