Buying rentals with an eye to cash-out refi

[Christian Carson]

Hi all,

I've finally found a regional bank that will write nonconventional rehab+purchase mortgages. They are 5/1 ARM, 20 year term at 5.5%. These aren't exactly Fannie terms but they look like the best available to an investor dealing with homes with <$50k purchase price.

The banker offered to do this in my personal name or an LLC. My concern is this: when the time comes to refinance, will I be better served holding these in my personal name? It seems that reading other forum posts indicate that banks might require me to season the title in my personal name for 6 months before refinancing. I value LLC protection highly, so this is kind of disconcerting for me.

I've also been kicking around the idea of doing a 1031 exchange with my real estate colleague after 1 year and obtaining purchase money financing on one of his properties. This might do us both a benefit since we would be able to "cash out" on both of our properties.

Does anyone have any insight for me? My number one priority is to get started swinging hammers with this financing opportunity, but I don't want to be disappointed down the road.