How To: Cash out Properties without having seasoning restrictions

[Jodi-Ann Birch]

I am buying two foreclosures (a SFH and a triplex). The intent is to refinance them once I am done with the rehabs and I want to stay clear of the seasoning restrictions often seen on conventional loans. I have been reading up a bit on how to creatively to this and I have two LLCs that operate in separate industries that I was hoping to leverage

Below is the plan I have

1. Have LLC 1 provide the funds for the purchase and provide a mortgage to LLC 2.

2. Have LLC 1 as the lien holder on the title

3. Then I will refinance the mortgage that LLC 2 has and pay LLC1

I hope this provides a better option as I have been calling around and the banks are telling me that if I use my own money I will have a 6month to one-year seasoning period.

Can I get some feedback on the above plan?

Has anyone ever done this and if so could you provide some guidance?

Is there a better way to do this?

If I go this route what steps should I take to make sure this is carefully structured as I am not trying to get into issues with the IRS?

I am open to getting professional help so please recommend any, if possible

[AJ Wong]

Quote from @Jodi-Ann Birch:

I am buying two foreclosures (a SFH and a triplex). The intent is to refinance them once I am done with the rehabs and I want to stay clear of the seasoning restrictions often seen on conventional loans. I have been reading up a bit on how to creatively to this and I have two LLCs that operate in separate industries that I was hoping to leverage

Below is the plan I have

1. Have LLC 1 provide the funds for the purchase and provide a mortgage to LLC 2.

2. Have LLC 1 as the lien holder on the title

3. Then I will refinance the mortgage that LLC 2 has and pay LLC1

I hope this provides a better option as I have been calling around and the banks are telling me that if I use my own money I will have a 6month to one-year seasoning period.

Can I get some feedback on the above plan?

Has anyone ever done this and if so could you provide some guidance?

Is there a better way to do this?

If I go this route what steps should I take to make sure this is carefully structured as I am not trying to get into issues with the IRS?

I am open to getting professional help so please recommend any, if possible

Hi Jodi..most lenders will require a six month seasoning however it's possible to use the purchase price and do an immediate cash out refi or first position HELOC. Check in with @Joseph Chiofalo he’ll give you some solutions. Good luck.