Refinance in an LLC

[Mike Sattem]

I recently completed the rehab on a 4-plex I bought this spring using a commercial loan and am not looking to refinance into a traditional 30 year fixed note. However, every lender I have spoken to has told me they will require me to deed the property out of my LLC and into my personal name before they can refinance it, at which point I will deed it back into my LLC. Every other rental I have had and refinanced was in my personal name, and I only started up my LLC the beginning of 2014.

How does this make sense?

Is this a common practice?

[Mike Sattem]

Hey @Gautam S. ,

You are correct in having the properties in your LLC for liability reasons, however when you go to refinance the properties you will have to transfer them using a warranty sale deed to your personal name, as the bank will not refinance a home owner by an llc. Once the refinance is complete, redo the warranty sale deed and transfer it back to your llc. It is actually a very easy process and only costs the money for the county to record it.