LLC Refi????? Explain It to me as if I were a 5 year old

9 Replies

Ive been trying to get unstuck and researched the BP Site

Family members purchased some investment RE with cash

We now want to put a loan on the properties but havent found any real long term (fixed rate 15 to 30 years) options being held in our LLC

Can the LLC give me a loan personally that I can then refi with a bank? Or how do I get the money out of our 100% cash purchased property?

Also, we have a total of 6 doors. Two Duplexes, Two SF homes. If all held in the LLC can this qualify for commercial financing?

Thanks for any help getting me unstuck

I'm not necessarily recommending, but what some people do is to transfer the title from LLC to yourself, refinance, then transfer the title back from yourself to the LLC. After you do that, technically the bank can come at you and ask you to pay off the mortgage, as you transferred the title, but I never heard or read of that happening.

@Brian Higa

Your only choice with an LLC is commercial financing. Usually 5 year or 10 year terms to get the better rates. Going 15+ will increase your rate since banks hold the commercial loans on their books and they don’t like holding loans on their books too long due to the risk.

You can get commercial financing on all those properties and the lender will prefer you have them titled in a corporate entity.  There are 30 year fixed options available.  If all the properties are in the same town/state you may be able to do a blanket loan with all included.

Soh Tanaka:  Thanks for the response.  Ive considered that but the problem that I think I will face down the road is because the refi is under me personally, i will limit the amount of times I can do this.  My belief and experience has been I can only get so many personal loans as the lender ultimately looks at me as the financial backing VS commercial loans where they look to the property and cash flow as the backing.  Ive heard this many times onthe podcasts but need the details on how to execute

Ryan O'mara - Do you have a contact or a suggestions? All the properties are all in the same town. I think Ive approached every small bank in town (theres not many) trying to get commercial financing as all six doors - 4 different roofs are titled under the same LLC. That was my thought when I first set the LLC up but am having difficulty executing this. All are owned free and clear. Ultimately I want to be able to (1) Execute the "Repeat" in the BRRRR strategy and (2) Equity strip for Asset protection. Everyone I have spoken have given me the 3 year fixed, then adjustable option.

Thank you for attention and response.  Any personal experience or professional references / consulting service appreciated


Christopher Phillips - Thanks for response. Do you know banks that will do 15 year loans? You mentioned a higher rate but I would consider a higher rate for the longer term. I would just figure the costs of the loan / debt and figure what my bottom line is. My problem is I havent found any Bank willing to loan to an LLC with any longer term, fixed rate financing.

Thanks again

LLC's must use commercial financing, which is almost always an adjustable rate loan. If you want a fixed rate loan, the property would need to be owned by an individual as opposed to an LLC

As an individual, you can generally have up to 10 Fannie/Freddie backed conventional residential mortgages. 

Most investors find the financing is so much easier and cheaper, that it makes sense to hold title in your own name until you hit that mark (and use insurance, rather than LLC, for asset protection), then look for more creative options and/or commercial financing. 

There is financing available for LLC's 30 yr fixed terms and 3 - 5 - 7 year Arms. Most of the loans are Stated Income, No Ratio Loans that are based of off the debt service. You also have Blanket or Landlord Loans available for portfolio's.

John Broussard

Do you have Banking contacts to provide a 30 year for an LLC?

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.