So, I will make this pretty clear on what we thought about doing, but is it legal? Practical, yes. Game changer, could be.
We want to essentially BRRRR out a property in 4 weeks.
1. I purchase the property cash.
2. I renovate the property in about 3-4 weeks.
3. I sell the property to an LLC which is held by my partner and myself to get a "refi" on. Use a conventional loan to purchase.
Has anyone ever done that, or can it be done? Would my partner being a majority holder help, or can I not sell to something I have an equity interest in?
Ex. We buy the property for $95k and put in $15k. I sell the property to the LLC for ARV value of $160k. Appraisal comes back good.
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
6y
@Cam Wright I guess I wish it worked like this. This is not an "Arms Length Transaction" and no banks that I know would lend you the money. You are tied to both ends of the deal, in different entities, but you are tied.
Flipper/Rehabber · Pittsburgh, PA · Member since 2018 · 22 posts · 36 votes
6y
@Cam Wright. I literally just bought a property cash 6 weeks ago for 115k. Did ZERO work to it. Placed a tenant within the first 2 weeks, called up the bank, got it appraised for 165k, and am refinancing this week. If you work with local or smaller regional banks (especially credit unions), many don't require seasoning periods. Just have to reach out to a few to find the right one.
I had my "normal" lender do some research and we figured this out. They can do it, but we all learned something in the process! I'm in the same boat. I'll be in about $110k after 3 weeks and already have a tenant lined up and ARV of $165k.