All Forum Posts by: Timothy Carlin

Hello all! 

I'm looking to do a cash out refi on a 2 family in Cincinnati that I bought five years ago. Looking for recommendations on an easy to work with local bank / banker. Any suggestions?

Sorry if this has already been covered.

I have a 4 unit property that I own with an investor that is currently in an LLC. We would like to refinance now after doing some improvements the last couple years and getting rent up to market rate. In talking to a couple different banks from what I can gather. Some will give us a loan to the LLC at a rate of apx. 4.4% (last time i checked a couple months ago) where as a couple will, if we switch to having the property in our two names, give us a loan at apx. 3.2% (again last time I checked) my understanding is this has to do with how they sell the loans in the world of frannie / freddie but i'm not exactly sure.

So this brings up a regular topic of to put property in LLC or not. In this case the partner in the deal (because of his higher net worth) wants the added layer of the LLC. I have heard from a couple people that one work around is to do the loan in our names and then after everything is filed with the county go down and transfer the deed back into the name of the LLC and basically just do not tell the bank you did this. While this sounds easy enough it also sounds a little dreamy and the people who told me this had not actually done this move and it was more story than action. Does anyone have any experience or information on this work around idea or other ideas that might work in this scenario. We would obviously love a fixed 30 yr loan at a lower rate more than a 5 yr adjustable on 25 yr amortization with a higher interest rate. PS this is in Ohio if it matters state to state. Thanks for any help / information this community has been an awesome resource!

-tc

Trying to get the business structure correct starting off. 

I own some rental property already and it has been going. In an effort to take the next step I am buying an 11 unit building with two other friends / investors, all equal owners. 

We plan to self manage the property. 

In starting our new LLC for this based on conversations with our lawyer / insurance agent / other investors here is a rough outline of what has been suggested to us. But there seems to be some question as to is this correct.

We started a LLC that will act as the holding company. Holding Company LLC

Holding Company LLC 100% owns an LLC that will own the property we are under contract to buy. Property Owner LLC

Holding Company LLC 100% owns an LLC that will manage the property. Management Company LLC

the idea is that the Management company has a contract with the Property Owner LLC to deal with everything. and that basically all the money flows through the management company. All utilities, garbage, rent etc all goes through the management company. then when the management company has funds left over they get paid to the Holding Company. This is also trying to simplify things to scale. So when we buy a second building it gets its own LLC but it too has everything flow through management company.

How to properly structure all of this seems like a common topic but i am having trouble finding a good source of info to break it all down. 

the current big question is the insurance company will have a policy with the Property Owner LLC and therefor how does that effect the Management Company LLC. Do i need a separate policy for the management company? Do the leases get signed with the management company or the property owner?

any info or direction to other sources on this topic would be greatly appreciated.

thanks

TC