Lenders PLEASE HELP!! Options for holding a flip!

[Edmund Isas]

Ok ill start by giving a little background about myself. Over the last 2 years I have acquired 3 multifamily units totaling 7 rental units. On the first unit my business partner and I paid mostly with our own cash. The other 2 we borrowed private money and have been paying mortgages on. The properties are currently netting roughly between $7- $10k a month. After expenses we have a positive cashflow of roughly $5200. This year we invested in our first Flip. We bought a house in a prime location in Houston for $255,000. Initially we were planning on doing a little TLC and getting it back on the market. After getting quotes from our builder we decided to keep some of the existing structure but tare down the larger portion of the home and rebuild a new home. The cost of reno will be roughly $200k. We funded the deal with a hard money loan for the purchase and reno and a private loan for the down payment. All in we are at $495,500. We estimate the ARV will be between $800-$850k.

The dilemma I'm facing is whether to sell the property, pay off the debt and pay taxes on the capital gains. Or if I should sell the house to our business, refi the home, pay the investors and hold the property for a year or two and then sell. It is my understanding that I can avoid paying capital gains taxes this way. True? I'm not sure I would qualify for the $800k loan using my personal income and credit. Not that my credit is bad. But as you all know when you're first starting off rack up a lot of debt is easy. What are my options? Currently we have an equity loan on one of the 3 properties we own. The other two we have private loans (family and friends) on. Any advice would be greatly appreciated! 

[Alex Bekeza]

@Edmund Isas You are correct. One of the many beauties of the BRRRR Strategy is that the cash out refi is a non taxable event. (It's not income! It's a loan).

There is also a wide array of DSCR based rental products out there which qualify the loan based on your FICO and the subject property's cash flow without looking at your tax returns or personal income situation.