Loan options when member of LLC resides in Property??

[Colin LaReaux]

Brief summary: 

My LLC (3 members) purchased a 2 unit rental property in cash and intended to BRRRR using a cash out refinance.

But one of the members will reside in 1 unit and rent the other. 

Can we obtain benefits of primary residence loan (HELOC, home equity) if it remains titled to the LLC?

The goal is to use the equity to acquire more properties, without having the standard 75-80% LTV requirement on a cash out refinance.

Any lenders have a product that can work?

Thanks!

-Colin

[Mike Davis]

@Colin LaReaux with it in an LLC, you will more than likely have to use Hard Money. The cash out refill will depend on your Experience of the members and how many projects yiu have done in the last 24-36 months scores and reserves.

[Kerry Baird]

It is difficult to get a HELOC on a property that is titled by an LLC. It is also difficult to get financing for a house held by an LLC where a member or family member is occupying. When I used DSCR loans, I sign that I am not owner occupying, as these are investment loans. Lastly, using conventional mortgages with LLC ownership is also not workable.

What might be workable: buy conventional, owner occupied. Get whatever HELOC you intend to get as an owner occupant. Change title to LLC. There may be a transfer tax when you move title.

[Jonathan Taylor]

@Colin LaReaux from my experience, you can't have both. Either refi in an LLC as an investment property or refi concern rio ally (assuming you qualify) as an owner occupy in a personal name.

Every investor loan has a clause that makes the guarantors sign stating the owner nor any of the owner’s family members will occupy the property.

Talk to a tax professional but consider a living trust if what you are seeking is liability protection. Living trust ownerships can be done while under a conventional loan but again, not a professional on trusts. A trust expert would help here.

[Colin LaReaux]

Thanks @Jonathan Taylor and @Kerry Baird! Just once I'd like to have my cake and eat it too... 

This particular property is small enough in the portfolio that I likely will just pursue a cash out refi with the LLC. May look into transferring title from the LLC to the individual to get the HELOC though.

@Mike Davis, I wasn't clear enough it seems. I don't need the $ for the rehab, so hard money isnt required. Just looking for the most efficient (time and cost wise) way to recycle the cash we put into the property. Ive done quite a few deals using cash out refis, but this time we have a member residing in it. 

@Mike Davis