Can You Refinance A Condo?

Question

Several years go, we bought a condo as a husband and wife and later moved it into an LLC as an investment property. Can we refinance an investment condo? I've heard it both ways. We paid $339k, we owe $85k, and we could list it for sale at $500k.

Thank you.

Stephanie P. · Answer

A condo isn't a security, it's real property.

Jack BeVier · Answer

@Wendy Black You can definitely refinance it as an investment property, as long as you're not living there. Some lenders have restrictions on condos that have high condo delinquency rates, but that's unlikely the case given the price range you're talking about here. My company does these kinds of loans (DSCR loans, loan size based on the rent, condo fee, insurance and taxes) every day. They're perfect for situations where you own the property in an LLC. 30yr term, rates in the 4s.

David M. · Answer

@Wendy Black

Myself and plenty of others have refi'ed loans on our real estate investment properties.  For example, how else do you think the brrr method works?  I'd say nearly have the discussion threads are people asking about loans and refi's.

I may not be an accountant and i don't know to what you are ferring to, but I don't think the IRS controls the lending industry, just taxation.  Also, I haven't heard of real estate investments being referred to as a "security."  I thought "security" had a particular meaning, e.g. Security and Exchange Commission (SEC).  As far I know, the SEC doesn't regulate real estate investments unless you go into syndications and probably REIT's...

Wendy Black · Answer

The IRS site I read said you can't refi an investment security, I think.

David M. · Answer

@Wendy Black

Since Title is held by a legal entity, the LLC, it is not eligble for conforming residential loans.  You will need to use commercial funding.  Probably why you hear different "stories" is because a residential lender will either say they can't do it or they will tell you to quit claim the Title back to your names, sell you the loan, and say quit claim deed it back afterwards.  In my layman's opinion, that is a bad move.  My one of my posts below:

https://www.biggerpockets.com/...

Remember, the lender has no responsibility to my knowledge to protect your corporate veil.

I'd be happy to chat.

Doran Summers · Answer

@Wendy Black yes. You trynna refi?

Can You Refinance A Condo?

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