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Jared Kotler
  • Rental Property Investor
  • Philadelphia, PA
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CASH OUT REFI CONUNDRUM

Jared Kotler
  • Rental Property Investor
  • Philadelphia, PA
Posted Aug 21 2019, 16:09

Hey, Bigger Pockets folks! I took the challenge last year, I think Brandon gave me about 90 days to buy a property. I have been thinking about it for years. I started doing flips, I'm a realtor, but I never got into buying and hold. The Brrrr concept really has taken hold and I ended up buying 3 properties. I bought them in an LLC, one for each. I have insurance, did renovations... now it's time to cash out and do it again.

I'm sure many of you already guess what the issue is, for those who haven't... turns out banks don't like to lend to newly formed LLC's. So much so, that they will charge 3% higher, 3 points plus only finance with a guaranteed rate for 5 years with a max term of 20 years. You can imagine (experts and newbies alike) what that does for my cash flow.

My options seem to be, flip the properties back into my name and pay 4% transfer tax, find a mortgage, then either put it back in an LLC or I suppose just keep it in my name. I am cognizant (or paranoid) that should something happen in one... my liability may extend to the other properties in my portfolio, which I intend to grow to 20 by the end of 2020.

I have three properties that will refi for a pretty decent amount. Question is: WHAT DO I DO?

Thank you, everyone! PS I just ordered Long-Distance Real Estate Investing, and after listening to SHOW 340 I'm thinking Kansas City here I come! Vendors, wholesalers, property managers, contractors, PML folks, feel free to reach out regarding any useful info. Thanks, everyone.

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