Can I BRRRR with an LLC

Question

Good Day,

I am new to real estate investing.  My question is can I BRRRR with an LLC?

Thank you

Jeff Copeland · Answer

Yes, just not with conventional financing. Conventional financing usually comes with the best rates/terms (i.e. 30-year fixed rate), but is typically only available to individual persons, not corporate entities.

As noted by other posters, this limits you to commercial financing, DSCR loans, and other "Non QM" loan products.

So, for residential properties (4 units and below), the choice usually comes down to:

1. Put it in your own name, get the best possible financing terms, and protect your self from liability with good insurance, to include an umbrella policy, or

2. Put it in an LLC, pay more for financing, but have the added layer of liability protection (and/or tax savings) provided by the LLC.

Many people stick with #1 until they max out the availability of conventional loans (usually a max of ten loans in your name, or whenever your DTI ratio prohibits more conventional loans), then move on to more advanced financing strategies.

And it's important to note than good insurance coverage is an excellent protection against liability risk, and you''ll still need good insurance insurance even if you have the property in an LLC.

The underlying theme of the LLC is the fact that if someone has a death or permanent injury on your property and they sue (which they will), your risk would be limited to the assets and cash held by the LLC, not your personal assets and cash.

But in either case, your insurance carriers have a duty to defend and will fight to minimize your loss.

River Sava · Answer

Hi Shamaine-

Yes, you can! Would love to connect and help

Shamaine Nials · Answer

Thank you so much for your response.

Wesley Sherow · Answer

I see you got plenty of Yes's, but it's leaving out the important part here. It's actually BETTER if you do. Reduce your risk and liability and get a new LLC for each property you purchase. Want to be double safe? Invest into your purchase's LLC through ANOTHER LLC that just serves to hold equity in the LLC's you get. LLC's are a magic entity you can use to insulate your person from risk related to real estate investments EXCEPT for criminal or gross negligence.

Eric Goldman · Answer

100%%%% LLCs can be used to brrrr. purchase and rehab loan and then cash out refi  with either a commercial bank for better rates... or a DSCR lender for a no or lite doc 30 year.

a lot of local banks can do a 30 year for an llc.... seasoning typically 12 months. so if you can carry it you will get a better rate, LTV and 30 years.

Really matters what the cash flow looks like. DSCR is not your only choice. I do all sorts of other things if it makes sense.

Stephanie P. · Answer

Yes but be mindful of title seasoning requirements.

Jack Mawer · Answer

Absolutely - use hard money for the purchase and rehab, then refinance into a 30-year fix DSCR loan.

Eliott Elias · Answer

Yes, you would use what's called a DSCR loan to cash out refi

Can I BRRRR with an LLC

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