LLC refinance attempting BRRR

9 Replies

I am attempting to BRRR as my primary business model. I thought I had an exit strategy in place with a mortgage company including terms that were fixed and amortized for 30 years with the understanding they had to season for 6 months.

Now, it is time to refinance the first property I purchased this year, and as I reinitiated the conversation with the cited mortgage company, I was informed there was a misunderstanding, and they couldn't lend to my LLC. This is entirely my fault, as it is explicitly and redundantly stated in these forums. I should have know. Nonetheless, I have purchased 3 properties running my numbers under these terms.

As it stands, I have commercial lending in place that is quite favorable because it is loan to cost (allowing me to borrow for the rehab), but the numbers are very tight, as the mortgages are amortized over 15 years. They also have 3 year balloons, which make me a little scared.

The first property is rented; the second property is very nearly complete with the remodel. I just purchased the third this week.

Does anyone have a suggestion on what I should do to secure long-term financing? Going forward, should I simply purchase new properties in my name?

I realize there are variables unknown and specifically unique to me, but I'm certainly hoping to solicit some wisdom.

Call around. I have a credit union that will lend to my LLC at 4.75% for 25 years. It's just a matter of finding the right lender for your situation.

I did some calling today, and I'll do more tomorrow. So far, it's much if the same. 15 year amortization with 75 to 80% LTV.

Is yours fixed, and what is the required LTV? I'm just curious what I could find.

Originally posted by @Jason D. :
Call around. I have a credit union that will lend to my LLC at 4.75% for 25 years. It's just a matter of finding the right lender for your situation.

 Which credit union are you using?

I use freedom credit union out of Philly. they only lend to the surrounding counties so they have to be local properties. They also have a fixed 15 year commercial re-fi and will do 80% LTV
Originally posted by @Jason D. :
Call around. I have a credit union that will lend to my LLC at 4.75% for 25 years. It's just a matter of finding the right lender for your situation.

WOW. Which one, pray? Did your LLC have to have been in operation for a minimum amount of time and/or have a minimum annual revenue? I'd appreciate anyhting you could share.

@Kere Jenner this was a couple years ago so I don't know if they still offer these loans.

They did not require any minimum time of business or annual income. I had to personally guarantee the loan.

Generally, commercial loans are based more on the cashflow and quality of the investment than your personal income and credit.

@Jason D. Curious about the signatures and names used when refinancing into a LLC. Would the LLC be listed and then you the owner of the LLC sign as the Manager?

Currently in the process but it looks as if my name and not the LLC is being listed on loan disclosures.