BRRRR: Refinancing into LLC?

[Daniel Mendez]

Good evening BP members,

For those that have done many BRRRR deals. When it comes down to the refinancing part. Do you guys find a lender that can refinance the property under your LLC? Or do you refinance the home under your name and then move the property to your LLC?

Thanks in advance

[Whitney Hutten]

@Daniel Mendez It depends.  If I'm refinancing to a conventional loan, I refi to my personal name and they will work to move title after close (talk to your lawyer and lender before doing this! **not a lawyer or CPA**).  You have to understand the risks of doing this and be above board with everyone.

If I'm refinancing to a commercial loan, I generally keep it in the entity that I purchased it in so I'm not having to establish yet another entity with the lender. 

The question will always be on the refi... do you really need an entity?  An entity takes money and time to maintain and there are 4 ways of protecting you and your assets you should do BEFORE an entity.  Also, you have to understand your tax implications.  I see many new investors start entities with the wrong members in place, as an S-corp when they are doing buy and hold, in the wrong states, etc... so we spend quite a bit of time unravelling the entity to get it set up correctly from a tax standpoint.