Cash out Refi for Partner/Investor

[Dan Walters]

Looking for any insight here on a Cash Out Refi w/a current Investor/Partner.

I have an investor that funded a SFR property last month using all cash. He will be qualified/eligible for financing on Nov. 30 after coming out of a SS 3 years ago. We want to pull the funds used in this transaction on a Cash Out Refi to put toward purchasing more properties. The issue that we face is my LLC owns the property that the investor has no ownership interest ( we have an established JV agreement between my LLC and him personally)and if we transfer ownership into his personal name we must wait 6 months to season ( per lender).

Any suggestions as to how we may be able to accomplish this refi without having to transfer and season?

[Edward Burns]

Create a new entity(company) 50% owned by either you directly or the LLC and 50% owned by your partner. Then sell have the LLC sell the house to the new entity with the new entity obtaining a mortgage to buy the property. Make the transaction as arm length as possible. Then the proceeds from the sale can be reinvested into the new company for expansion purposes. The only thing I do not know what the tax consequences of this would be.