Can I do a Cash Out Refinance on a property in my LLC name

7 Replies

Is it possible to do a cash out refinance on a Multi rental property in my LLC name? If so, will they allow me to keep in my LLC name? Have the property for a little over 2 years now. Please advise.

Yes as along as you getting a commercial/portfolio loan.

If it's a conventional Fannie/Freddie loan it will need to be in your personal name.

It's a common misconception that 5+ units is needed for commercial financing.

Commercial/portfolio loans can be used on SFH's and 2-4 unit MFR's as well.

You are a absolutely correct on that stmt in regards to the misconception. Do you have a list of those lending institutions that provide such services so i can do my due diligence? Thanks in Advance 

Generally the same banks, credit unions, savings & loans, etc will all make commercial loans. All my properties are small multi families and all are carried on commercial loans... oops take that back, the very first property I bought was bought using a personal loan. The rest have all been commercial. I used US Bank commercial loans for the first 5 properties, the last 5 or 6 have been local portfolio lenders. You will find that commercial loans are much easier to get with about 1/4 the paperwork. You need to get used to the fact that you will have a 5 year balloon payment but once you get comfortable with that you will probably never go back to personal loans...

There are short-term (2-5 years are the max) interest-only loans by hard-money lenders that have a balloon payment at the end of term. These typically are higher rate and easier to get to fund.

There are also amortized 15-30 year loans that are based on DSCR, LTV, and credit. These are commonly referred to as rental loans. Also easy on documentation (much easier than DTI & other income-based loans), the interest rates are better than the above short-term loans, but not as good as conventional loans (that require DTI and income etc).

Most cash-outs aren't greater than 80% of the value of the property.

Estimates:
HML Loan - 8-14% interest only, short term loans, limited documentation.

Rental Loan - 5-9% amortized, 30 year (some options for 15yr), a bit more documentation.

Local Credit Unions and banks - 4-8% amortized, 30 year (some options for 15yr), documentation varies but typically requires some debt-to-income.

Conventional Loans - 4-6.5% amortized, 30 year with options for 15, documentation heavy.

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