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Nicole A.
Pro Member
  • Rental Property Investor
  • Baltimore County Maryland and Tampa Florida
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LLC with rentals - Buy out, sell, other options?

Nicole A.
Pro Member
  • Rental Property Investor
  • Baltimore County Maryland and Tampa Florida
ModeratorPosted Jan 15 2021, 06:02

Hi BP!

As a few of my fellow BPers know, lots has been going on in my life over the past year or so. I've been in the process of splitting up with my husband/partner. We are on good terms. Everything is fine. He has already bought me out of our primary house.

Now, we have a LLC that we own 50/50. This LLC currently owns 3 rental properties. Here's the details on them:

Duplex #1

Apt 1: $825/month rent
Apt 2: $850/month rent
P&I: $616.99/month
Insurance: $627/year ($52.25/month)
Property tax: $2,240.04 ($186.67/month)
Water: Roughly $50/quarter ($17/month)
Remaining mortgage balance:$44,502.74 (as of 02 DEC 2020) 6.14%

Duplex #2
Apt 1: $825/month rent
Apt 2: $850/month rent
P&I: $455.04/month
Insurance: $610/year ($50.83/month)
Property tax: $2,581.55/year ($215.13/month)
Water: Roughly $50/quarter ($17/month)
Remaining mortgage balance: $39,371.83 (as of 02 DEC 2020) 4.75%
*For Duplex #1 and Duplex #2, insurance and property tax is paid manually by New Page LLC. It is not wrapped into the mortgages.

Rowhome
$1400/month rent
PITI: 1,010.86/month (lately has been around $990/month)
Water: Roughly $50/quarter ($17/month but tenant is supposed to reimburse)
Remaining mortgage balance: $111,252.84 (as of 02 DEC 2020) 7.935%
Prepayment Penalty until April 2022 on rowhome property only (not duplexes)

Certain Sprout loan programs, for investor occupancy, offer lower interest rates for loans with prepayment penalties where permitted by applicable law and regulation. If a Loan is sold to Sprout that is subject to a prepayment penalty, then the term of the prepayment penalty must be 3 years, and the prepayment must be for 6 months of interest on such portion of the loan principal that is (i) prepaid within the term of the prepayment penalty, and (ii) exceeds 20% of the original principal amount of the Loan. Prepayment penalties are applicable regardless of the reason for the prepayment of principal and are applicable to prepayments resulting from the sale of the Subject Property (unless prohibited by law or regulation).

As you can see, decent cash-flow and equity on the two duplexes. Not a terribly awesome deal on the rowhome, but we did get it for just $5K out of pocket money.

I'm torn on what to do. 

  • Sell the properties, split proceeds, and dissolve the LLC. Use this money to buy other rentals on my own. Part of me worries it'll be hard to find good deals especially these days.
  • Buy him out and keep all properties, but unsure how much this would change my numbers.
  • Let him buy me out (if he is interested).
  • Other ideas I haven't thought about? Perhaps he keep some, I keep some? Perhaps if they're refi'd out of the LLC and into my name, I'd get better interest rates?
  • Do...nothing?

Apologies for the long post. I could use the help of those smarter--and more creative--than me at this point in my life.

Thank you!

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