Form LLC First or Later

[Wilson Liu]

Hi BP community,

So a partner and I are looking for our first deal but had a question around how we should proceed.  We have the funds to offer cash without any loans but would like to then refinance to pull out cash maybe 2-4 months after buying. 

We will be forming an LLC to hold the property for legal protection. However we probably won't do this until after closing so we're making offers in our personal names. Is there any issue with doing it this way or should we form the LLC so we can close within the LLC?

Also, should we refinance as a residential loan in our names and then place in the LLC with a quit claim deed or just refinance once it's within the LLC as a commercial loan? If we do the former, does it matter what type of mortgage company we go with (e.g. small local bank vs typical big bank or mortgage specific lenders)? If we intend to eventually get mortgages for future properties within the LLC, should we just go the same bank we plan to use in the future?

I hear lots of different opinions on whether banks usually call your loan when quit claiming.

Thanks!