How to do a Cash out Refinance

Question

If I want to perform a cash out refinance to pull out equity out of a deal and perhaps purchase another property what are the steps necessary and how long does it take?

Please DM ME I am not advertising or selling anything. I just want to get more information that’s all. Anyone experienced or knows a good amount about a cash out refinance please message me and I’ll respond ASAP. You can just message and say CASH OUT REFINANCE. I’ll rather you message me than me message you as it’s quicker.

Chris B. · Answer

It sounds like more of an LLC question rather than cash out refinance question.  A cash out refinance is a simple process.  I just completed one.  You are asking how you can move assets between LLCs and I don't have an answer to that.  Maybe, re-state the title differently?

Bellman Tumasang · Answer

I'm going to use an example to make things easier assuming I have a real estate holding company called Holding LLC which 100% owns and manager manages Property 1 LLC and Property 2 LLC which own Property 1 and 2.

Let's say I bought property 2 for $500k with $100k down and financed $400k. After a couple years it's worth $600k and my remaining loan balance is $350k. If I refinance Property 2 at an 80% LTV with it being worth $600k the new loan would be $480k and after paying off the old loan balance of $350k I should have $130k.

However, that $130k I may want to use it as a 20% downpayment for a $650k property. Since the equity pulled out is payed to property 2 LLC and I want to purchase Property 3 and create Property 3 LLC could I purchase Property 3 where Property 3 LLC is funded by the $130k downpayment from Property 2 LLC then transfer the ownership of Property 3 LLC to Holding LLC so all properties are completely separate.

Or could I just simplify and pay the $130k from Property 2 LLC to Holding LLC then use that $130k from Holding LLC to fund Property 3 LLC to purchase Property 3 and have Property 3 LLC 100% owned and manager managed by Holding LLC.

Charles Carillo · Answer

@Bellman Tumasang

I would first figure out a rough value estimate on your property and then calculate how much potential equity you have. If it is minimal, it might not be worth it. You can then reach out to different lenders and ask them what you can expect for terms/fees/rates etc.