BRRRR paid off is it a cash-out or just a refinance?

10 Replies

I'm just about done with my first BRRRR

I purchased it with HELOC attached to another property so there was never a mortgage on the property.

To get a mortgage on it so I can access the equity what are my options? 

I've heard you can essentially sell it to yourself to access 100% if you use an LLC (if the LLC owned it), but I think I would have had to place it into the LLC awhile ago which I did not, correct?

Thanks

From what I've learned over the weekend from David Green, you need to do a cash-out refinance, at 90% LTV.
Because interests are so low historically this could be better than a HELOC.

The way how I am getting started is by creating an LLC first, precisely because of what you stated in your introduction, I don't want to drag my personal business with my personal finances. And in order to keep it separate from credit and possible damages, an LLC seems to be the right thing to do. Besides, I think it will be easier to keep track of everything under an LLC, banking, managing, and reporting. I have had a business as a sole proprietor and it was hell keeping things in order and keeping track of all my expenses, etc.

@Joseph Hummel

First off, you don't need an LLC to do a Cash Out refi on your property. These days, that is a myth. Even if you are in an LLC, you don't need a commercial loan to purchase, refi, or cash out either. How long will it stay that way? Who knows.

In order to access tax benefits, you will need a mortgage on the property.  

Cash Out rates did just come down a bit but they may go back up before you know it.  I am not familiar with Crystal Bay.  What state are you in?  I may be able to give you some rough quotes if you give me some numbers.

Cheers!

Nick Belsky

As others mention here, it's a cash-out refinance. If it's an investment property, i.e. you don't live in any of the units, likely limited to 75%-80% LTV. The beautiful part? That's all tax-free cash to you as you own this property free & clear. Great for shoring up reserves, paying down any high interest credit and/or acquiring more well-located income property

@Joseph Hummel

Ok thanks y’all.

So nobody can share how to transfer a property from LLC to yourself? I had a mortgage lender tell me it was possible only if I put in in the Llc right after I purchased it…

You transfer from llc to yourself with a quit claim deed an that is what you would need to to obtain regular conventional financing on the home. A lender can coordinate that for you with the title company and record at closing. 

Originally posted by @Alan Lacey :

You transfer from llc to yourself with a quit claim deed an that is what you would need to to obtain regular conventional financing on the home. A lender can coordinate that for you with the title company and record at closing. 

Thank you Alan - I think I typed that wrong but your answer was actually what I was looking for... strangely it was a lender in Grand Rapids that told me about it