Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 5 years ago, 11/08/2019

User Stats

636
Posts
652
Votes
Kyle McCorkel
  • Rental Property Investor
  • Hummelstown, PA
652
Votes |
636
Posts

What terms do you get with an LLC for a cash out refi?

Kyle McCorkel
  • Rental Property Investor
  • Hummelstown, PA
Posted

I've been doing BRRRR's with great success in Central PA (Harrisburg, Lancaster, York, Carlisle area) for 2 years now. That success has largely been due to a lender offering fantastic terms on portfolio loans for 1-4 unit properties:

  • 30 year amortization, 30 year term
  • Lends to LLC's
  • Fixed for 10 years
  • Great rates (My last refi was 4.25% interest rate)
  • No seasoning period
  • 80% LTV

To my dismay (as well as virtually all my fellow Central PA investors), this lender recently announced that they are no longer offering these loans to LLC's (they also mentioned a potential cap on total loan amount, but nothing official there yet). Not a big deal for someone doing one or two deals, but for those of us who are really trying to scale legitimate businesses with asset protection, this is devastating. It looks like the party is ending, at least with this lender.

Yeah, there's ways to possibly get around this (with added costs and/or drawbacks) but I don't want to get into those weeds in this post.

I knew we were spoiled with this lender, but I really got hooked on these terms especially the 30 year amortization.  Properties that produced healthy cash flow ($200-$300) at 30 year amortization now are projected to produce a fraction of that amount (<$100) when you use a 20 year amortization instead.

Now that I've begun the arduous task of shopping around for a new lending partner, it seems that everybody only offers 20 year amortization periods (not to mention a higher interest rate and sometimes lower LTV).

My question to the forum is, what kind of terms do you get in other regions/other parts of the country on a cash out refinance for a property in an LLC - specifically using the BRRRR method? Were we really just super spoiled, or do I just need to keep looking harder for that next "perfect" lender?

Loading replies...