Seasoning requirements for cash out refi on an LLC loan?

5 Replies

Hello everyone. I'm trying to do my first BRRR deal. Bought the home 6 months ago, did the rehab, and it's now rented and cash flowing. Based on the ARV, I should be able get cash out at 75% LTV.

I spoke to my first lender and was told I need to quitclaim the home into my name, wait 6 months to season, then do the refi.

That sounds wrong to me.

Can I just keep it in my LLC and do the refi there?

Any other tips for a BRRR newbie?

Thanks.

That’s the same information we have received when interviewing lenders.  That is the down-side to using an entity to hold properties.  When owned by an entity, commercial lending is the norm.  Otherwise, the quit-claim route.

Originally posted by @Kerry Baird :

That’s the same information we have received when interviewing lenders.  That is the down-side to using an entity to hold properties.  When owned by an entity, commercial lending is the norm.  Otherwise, the quit-claim route.

Thanks, Kerry!

Having never done a commercial loan, I'm curious enough to give it a try. I assume the rates are higher but that's okay in the spirit of learning. 

For commercial, is it hard to get a loan if the entity has no financial history?  Do I basically cosign on the loan (as an individual) too?

Thanks in advance :)

@Jason T.

There are lenders out there that have products made specifically for your situation.

  • New LLC
  • No income verification
  • No seasoning on title
  • Cash out based on appraised value

Rates are not comparable to Fannie/Freddie, but if the numbers work, those loans close pretty easy.

Hope that helps

Stephanie

Stephanie is correct, and many of these lenders offer 30 year fixed rates, too.  Rates are not as competitive as fannie/freddie, but if you can refinance and cash out your original down payment funds every 90 days, and use these fund towards the next project and repeat the process over and over, the cash flow quickly adds up and the difference in rates becomes a non factor as you would not be able to acquire as many properties in a short period if you choose to wait for fannie/freddie seasoning restrictions to terminate.

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