Hello everyone. I'm sure this question has been asked before, so I apologize. I just purchased my first rental property on Dec. 29th. In order to do this, I took out a HELOC on my primary residence. My plan is to apply the BRRRR strategy and re-fi the rental property in 6 months after repairs are done and a tenant is secured. Here's my question: should I transfer the title of the property to my LLC? I purchased an LLC a few months ago but the title for the rental is currently in my and my husband's name basically because I wasn't sure if it was necessary or what I should be doing (haha, as I said, I'm a first-time investor). Would it make sense to just leave in our names and not the LLC? Would there be any consequences during the re-finance process if it is under the LLC and not our names? Thanks!
I think that you would have to take the property out of the LLC to refinance it, so that is something you may want to research with your lender before making a decision. Or find a lender that will do a cash out refi to an LLC, though from what I've seen from others here, it seems to be difficult to do so.
Cash out re-fi on an LLC held property? As @Bob Okenwa mentioned, you'd have to find a bank willing to do that. At the very least if you do find one you'll have to personally guarantee the loan I'd bet. If you have a relationship with a local bank or credit union they may be willing to do a portfolio loan where they hold the note rather than sell it to another institution.
It IS possible though, we do it, but our relationship is with a local bank and we have several LLC owned properties under a portfolio loan.
However I'd recommend you find and talk to a couple local bankers before transferring anything, see what they say. Your best bet would be to ask for a commercial lending officer but be aware, unless they REALLY like you the LTV is probably going to be something like 70% max.
Thanks for the info! I will probably keep it in my name until I refinance it then.
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