Reason not to Hold Property in an LLC...when trying to cash out..

[Brandon Sturgill]

I just received this email from my lender related to a recent effort to re-fi a small multifamily:

I just got some news from Underwriting. It appears the subject property is deeded in the name of your LLC. We cannot grant a loan for any more than what it due on the note. Essentially, it will run the same as a purchase from yourself except you’re getting the cheaper closing costs from the title company. If you want cash out it would have to be in your name for 6 months.

If your lender has a similar requirement...don't get caught out like this...don't transfer to your LLC until you re-fi is this is your strategy. But at the very least, make sure you know your lenders requirements up front!