Cash out refi on a Brrrrr :)

[Robert Tolnai]

Ok so I love the Brrrr strategy but I am running into these 2 obstacles from lenders: 

1. Since it's an investment property and bought in my LLC - lenders are saying that they can't do a cash out refi on a commercial loan/business loan

2. If I keep in my personal name so I can do the cash out refi, then the interest rate is about 1% point higher on a cash out refi than on a rate and term

What are you guys doing differently to make this work? 

Thank you 

[Jeff Copeland]

Neither of these things should come as a surprise. Conventional loans (which generally offer the best rates and terms) are not generally available to LLCs. They are for individuals. But in most cases, you can just transfer the title into your own name. at the same time you close on the refi. 

And you can't really implement the BRRRR Method with a rate/term refi.

Cash out will generally be a point higher than rate/term, and investment property will generally be a point higher that owner-occupied. 

I think your situation is just a case of "it is what it is".

That being said, you could certainly crunch the numbers on buying down the rate up front, versus paying the higher interest rate. And you could look into commercial financing or DSCR products.

And, the truth is, interest rates are historically speaking still pretty reasonable right now. Just factor it the cost of financing on the front end, and keep grinding.