Cash-out Refinance on 10 Properties with Individual Name vs LLC

[Bon Osonwanne]

Hi Everyone,

I usually buy my properties cash up-front. However I want to do a cash-out refinance a year later. Should I be buying properties under an LLC or using my name so that I can get loans on the property as an individual?

Thanks,

Bon

[Neil Sinha]

@Bon Osonwanne, @Nicholas Richard Ray

Depending on how the bank underwrites, having a signed lease will allow you to use the rent revenue as income in the DTI. The LLC vs personal debate is long and well-documented on BP. One type on the search bar will give you tons of fodder, so no need to recreate it here. The 10 loan limit is related to the secondary market, so if you have more than ten personal loans, you at that point may want the LLC to get business / commercial terms as opposed to personal / residential terms. However, as you note, a portfolio lender who will retain the loan on their books as opposed to reselling it will be able to extend past the 10 loan cap. DTI and other financials will still be at play, I think, but best to get the lenders policy on those loans directly from them.