LLC cash out refinance

LLC cash out refinance

Norwich, CT · Member since 2017 · 17 posts · 9 votes

My friend/business partner and I purchased a two family investment property using seller financing about a year ago. It's a 50/50 split partnership. I recently inquired about doing a cash out refinance and was told it can't be done because we are in an LLC and it's a 50/50 split. It can only be done if someone is majority owner (51% or more) or we change the way title is held. We can refinance the house but cannot take cash out. We need the cash in order to purchase our next property. Does anyone know if this is accurate information and if so, any insight on how to handle this situation. Are there other options or alternatives? Two factors to consider, We are not apposed to refinancing out of the LLC and a HELOC is not an option because there is a time limitation on the refinance, which is fast approaching. Thanks in advance for any help!

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Investor · Brooklyn, NY · Member since 2019 · 185 posts · 205 votes
6y

Hey, @Jordan Perryman. Not ready to pull the trigger on anything yet, and still doing research, but I did find a couple options. 

Quorum Federal Credit Union would do a HELOC on a property owned in an LLC and let you borrow up to 80% of your equity. First 5 years are interest-only payments. Also, if you have two or more properties in an LLC (not sure if needs to be in same LLC), they will do a cash-out refi on one of them using the other as additional collateral. 75% LTV. I spoke with Tiffany Mazzoccoli over there.

I also spoke with @Alex Bekeza at BRRRR Strategy Funding, who will do a cash-out refi in an LLC for a loan value of $100k+ at 70% LTV (aka, an ARV of ~$145k+ minimum).

Keep me in the loop with what you decide as the more info I can get, the better.

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  • Investor · La Crescenta, CA · Member since 2016 · 37 posts · 10 votes
    4y

    How did you find your private money lender? My son and I were rejected for a refi cashout because of his self employed status. 

    Thanks

    Coco

  • St. Louis, MO · Member since 2017 · 1 post · 0 votes
    3y
    Quote from @Brian Kantor:
    Originally posted by @Hoi L.:

    @Brian Kantor

    Any updates to your cash-out refinancing of your LLC property? I am about to close on a residential property that I am still debating to out it under my name now and risk DoS following transfer to an LLC or just put the property under my LLC now and deal with the cash-out refinance part. Trying to pick the lesser of the 2 devils!

    Hi, Hoi. I ended up finding a private money lender looking for a low-risk option to provide steady cash-flow. So with him, I was able to borrow 75% LTV at 4% interest over 30 years. If I handnt had this lender, I was able to find a broker who would let me do it. In short the process is like a double quit-claim. I buy the property in my LLC in cash, quit claim it to my own name for the refinance, take out the refinance mortgage in my personal name, and then quit claim it back into the LLC. DM me if you'd like that contact.


  • Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    You can do this with a DSCR loan.

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