Lender that refinances LLC owned property - know any?

Question

Having a little trouble finding a lender/bank that's ok with refinancing a mortgage of LLC owned property.  Have any of you found such an institution you can recommend?  I'm looking at refinancing a couple in 6-12 months.

Jerome Hanson · Answer

@Raj I. The issues I'm facing in refi under an LLC is that I can't find a bank that will do it yet.  Haven't been searching that long so it's not a big deal for me yet.  They state reasons of liability for not allowing their institutions to do those. Apparently something about the mortgage crisis few years back has the banks scared on this topic as well.

Yes I do have rentals in LLC's but for now I don't see too much benefit in doing that.  I have my own personal reasons for doing so, but from a purely business standpoint, I don't think it makes that much of a difference.  For asset protection, buy insurance no matter what.

Bryan Johnson · Answer

Shouldn't have an issue refinancing conventionally as long as you hold less than 10 mortgages. If an individual's LLC holds title to the property, you should have no issue transferring it to the individual for the refinance, completing the loan, then transferring title back to the LLC. Prove ownership of the LLC and you shouldn't have an issue.

If you're holding more than 10, you'll need to look into commercial.

Shiloh Lundahl · Answer

@Jerome Hanson I have had a good experience with Kansas State Bank in Phoenix. PM me and I will give you details.

Stephanie P. · Answer

@jerome hanson

@Jerome Hanson

You're right, most banks etc... won't lend to an llc because Fannie Mae and Freddie Mac generally don't lend to LLC's.  You're going to have to assess whether having an llc gives you the protection you're looking for at a cost (higher interest rate and points) that's feasible.

Dodd/Frank was not your friend in this matter.

Stephanie

Lee S. · Answer

From what i've read and gathered an LLC doesn't provide much protection when it comes to liability, to each their own though.  Right now i'm carrying properties in personal name with a million dollar umbrella policy.

The issue with buying in an LLC, at least the way I'm doing it with the BRRRR strategy, is the refinance becomes a major issue because you can't get a traditional loan from a lender with the best rates in the name of the LLC.  Your then stuck being unable to refinance or having to refinance at a much higher rate via a commercial loan etc.

MIchael Rickerd · Answer

Jerome,

I haven't crossed this bridge yet with my properties, but I will soon. Let us know who you find. I am sure there are lenders out there, you just have to search em out. I remember a BP podcast where a guy called close to 50ish lenders and finally found one that would refi in as little as a year.

Don't underestimate the power of an LLC! They are most definitely worth the hassle associated with them. "It is better to not need it and have it, rather than need it and not have it," is very applicable to an LLC.