Inherited home, cash out refi by multiple heirs

[Brendan Jones]

Hey all,

First post on BP!

My father in law recently passed away leaving his 3/2 single family home to my wife and her 20 year old brother.  We've been wanting to start investing in real estate over the last couple of years, and want to keep the house as a rental, but also tap the equity. The house is located in a suburb of Houston. 

The house is currently on a 30 year note at 6%. There is about $60k owed with around $120k in equity. I'm thinking I'd like to refi and cash out about $60k of the equity. We'd use about $10k for updates and repairs, and use the remainder to invest further in real estate. Looking at other rentals in the neighborhood, we should be able to get between $1400-1600 a month in rent. I plan on setting up an LLC to own the house long term, with my wife and brother-in-law as owners of the LLC. Per the will, my wife is trustee for my BIL for a few more years.

Now my questions. My wife is a stay at home mom, and my BIL is a 20 year old student. Will I need to be on the loan for income purposes, or will the remaining equity be sufficient to do the refi? Should we do the refi before putting the house into the LLC or after? Other than my questions, how does my plan sound? Anything else I should be thinking about?