Flipper/Rehabber · Rahway, NJ · Member since 2017 · 137 posts · 123 votes
Hey BP members! Question regarding buying a property in an LLC with a partner.
If I purchase a buy and hold property in an LLC with a partner 50/50 split (BRRRR) and we go to get a cash out refi is there going to be restrictions when it comes to the refi part? Does it depend on the bank / lender? Will they do a cash out refi keeping it in the LLC or does it have to come out?
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
Most banks won't have a problem giving the loan to an LLC, but both you and your partner will most likely be underwritten. It will most likely be fully based on your abilities to qualify and you will sign personal guarantees. So it's essentially as if they are lending to you as individuals, but the mortgage and title will go in the LLC name. It has to be quite a large property with low LTV before non-recourse loans are ever considered.
Another question regarding an LLC, I recentely talked to an accountant and he said each house should go into a separate LLC. Is that better to have 5 separate LLC's with the same partner? Or is there a way to keep them in one LLC while protecting each property seperately?
Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9y
Every property in its own LLC is the safest place to be and the only way to separate each property from another (although in my opinion that is overkill)