All Forum Posts by: Erick Garske

Hi Elaine, 

I believe that the transfer would be about $795.  That's a great rate! Who is your lender?

 Hi Ned,

Unfortunately, the lender does not finance LLC's or other entities. In this case, I have opted to hold title in my name in order to go through with the cash out refinance. I need to look at other means to protect myself from litigation.

The three legal scenarios that I understand are:

Door 1: Hold title in an LLC (either one to one ratio of LLC to property, or one to many of one LLC to many properties)

Door 2: Hold title in your own name but protect yourself legally with a blanket insurance policy

Door 3: Hold title in an LLC and hold a blanket insurance policy.

So I may opt for what's behind door number two.

I have some property in Baltimore City held under my LLC. I would like to do a cash out refinance, but when the properties were purchased, the title was recorded under the name of the LLC. This had been done for liability protection.

In speaking with a lender, I am told that the properties would need to be held in my name before the conventional loan could be closed. The lender explained that this is necessary in order to sell the loan to fannie mae.

The downside of this, is the that the state of Maryland requires that a transfer fee be paid on top of the nominal recording. The transfer fee would amount to the same cost as actually closing on the property. In fact, it would be like paying an additional two points for the loan. The loan is no points at 4.75.

So the dilemma is whether or not to pay for the transfer cost of holding title in my name verses an LLC in order to secure the loan, or to seek out a non recourse loan in order to preserve the current recording of the title.

Thanks in advance for your advice.

 I didn't consider refinancing since this was purchased through a 1031 exchange. I am not stuck with a hard money loan at all since this was an all cash deal.

I have talked to two banks. The second bank replied below:

Yes, we offer these programs. You can get up to 75% if less than 4 financed and 70% if financed property 5-10 of the appraised value NOT to exceed the original purchase price.

I am waiting for their reply with their rates.

I a executing the buy, rehab, rent and repeat strategy. 

That said, now that I had purchased a property with all cash, rehabbed the property I am ready to refinance and use the cash out proceeds to purchase another property. 

I had expected to get a rate of 4.65% to 4.75%, but these are the terms that I was offered from a lender:

Rate: Between 7.5% & 8,25% Fixed for 7 years, [a 7/1 ARM] Fully amortizing P & I payment on a 30 year schedule. The loan adjusts annually after year 7 thru the remaining term. This is a PITI payment so the lender will escrow for taxes and insurance and will be collecting the state required reserves in advance at closing

What type of rate should I expect for a cash out refinance?

Thanks.

I am looking for a reputable licensed home inspector available in the City of Baltimore. What resources can I use to solicit and check references for home inspectors?

Thanks @Joe Norman for referencing the map and for the advice.

@Chris Mason Thanks for your reply. I am not self employed and am W2 employee for the same company for over ten years. The company that I own real estate invest property under is a California LLC.