Convert to LLC during cash out refinance??

4 Replies

I want to do a cash out refinance and at the same time (if it makes sense) convert the property to an LLC. Would doing that at the same time be beneficial in any way?

Originally posted by @Bob Mazza :

I want to do a cash out refinance and at the same time (if it makes sense) convert the property to an LLC. Would doing that at the same time be beneficial in any way?

 Are you asking from a tax perspective, or a legal perspective? If tax related, @Vlad K. can help. If legal related @Edward Schenkel can help. Both based in Connecticut. 

@Bob Mazza I would say that this certainly depends on the loan type you are receiving for your cash out loan. If you are using "conforming, conventional" loans (Fannie/Freddie) then you cannot close in your LLC name. But you can switch title after closing. The loan would still be in your personal name. For a "portfolio" loan, you can close with an LLC...but your rate and terms would not be as good as a conventional. Both have their pros and cons so feel free to ask more questions if you need. Thanks!

@Andrew Postell Thanks for the response. I think you answered my question, no reason to switch title during refinance, I will do it after and keep the loan in my name.

@Filipe Pereira thanks for the referrals to Vlad and Edward. Looks like Edward is very local and could be a great person to know in my area.

@Bob Mazza I agree. Keep it in your name for the purpose of the refinance. Many investors have unrealistic expectations in regards to interest rate when closing in an LLC.

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