Borrowing from LLC to sidestep seasoning requirements?

[Lauren Perry]

Has anyone here had experience with loaning yourself money from an LLC in order to get around seasoning requirements for your refinance?

We are planning to use the BRRRR strategy, but trying to refinance as soon as possible. I read a BP post that spoke about creating an LLC to "borrow" from to finance the initial purchase. As long as that LLC loan is secured and recorded, you can (supposedly) do a rate & term refinance and avoid the seasoning requirements of traditional cash out refis. I spoke to a lender who thought it might work, but wanted to check with his underwriters before he would commit to taking it further. Just curious if anyone here has experience doing that, and whether there were any downsides to using that strategy.

Thanks in advance!

[Curt Smith]

These shell games 99% have no basis in reality.  In legal speak;  Its called the Duck Test, or Form over Function.  IE if the end result if the machinations is still the same, then ignore the machinations...    Call a few bank lenders to get the truth.  Please don't ask a forum for what a Bank will do, call a few lenders.

As mentioned there are non W2 lenders, asset based 30 yr lenders, now some times called portfolio, softmoney, or factually DSCR lenders.

Google:  Finance of America, Lima One, Angel Oak, ask re their asset based 30 yr rental products.   I have 2 of these because I don't have a W2 I'm full time real estate investor.

You'll pay a bit higher fees, higher interest rate (finance of america is lowest) higher LTV but no seasoning. To me REFI out on a rental makes sense when the resulting PITI is no less then $300 less then rent, and DSCR is at least 1.5, ideally 1.7 or higher. Please google DSCR and why this is an excellent metric for rental performance, better then cap rate.

curt