So we have a multi-family prop in Newark NJ that we are renting out. My partner used a home equity loan against her house and we paid for it in all cash. On the advice of a RE Atty that frequents our RE Investment Club we put the deed of our house in a Trust with our LLC as the beneficiary.
Now our problem arises every time we tell banks that we want to do a refinance because it seems that no one knows how to handle it through a trust. Has anyone ever run into this problem?
Also, a lot of banks are saying we need 1 or 2 years 'seasoning' meaning showing positive rents before we can do anything. On top of that, theyre saying we can only get 70% of the purchase price meanwhile we bought it at 95k and have put in 15k in repairs including a new roof. Getting only ~70k is not what we are looking for.
Ive always thought that youre able to cash out refinance at least 70% of fmv / appraised value. Also the house is making $2200 a month in rent so thats about 3.5x what a 100k mortgage principle and interest would be. This is a no brainer for lenders! Also myself and my partner have great credit and plenty of income..
So my questions are - does anyone have experience refinancing with a house in a trust and do you have advice on where to go to get a 'real' cash out refinance.
Thanks all for any help!!
Most lenders are scared of LLCs and trust with all the fraud out there. Put the deed back in your personal name and get it done. Did you tell the banker you would be a personal guarantee the loan? Is the RE lawyer who advises you is he a Guru?
Yes we told them we would do a personal guarantee.
And our atty is a well known attorney we met and speaks at our REI club frequently. Not a guru.
Thanks for the reply @Joe Gore
Just put the deeds back in your name and refinance. If you put the deeds in a trust to protect your asset, it just wants work get a good insurance policy.
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