Paid cash for rental, titled in LLC, need advice.

[Rory Fowler]

After a year of working our tails off to get in position to invest, we finally purchased our first property. And we feel great about the deal we got. We formed an LLC and found a lender who would take a 30 year traditional mortgage. While the lender was dragging their feet, I set up a $100k unsecured line of credit at my bank. The lender let the closing deadline lapse and we used the line of credit to purchase the property. So now we want to move it to long term financing (15 or 30 year) and I am learning it is hard to get through an LLC. Should I title the property back in to my name to get financing? Does anyone else title the property back in to their LLC after the mortgage is secure? My CPA, attorney AND bank are telling me this is common practice but it seems shady to me. I'm fine with 75% of purchase price because we were planning to put some cash in to the initial purchase. The deal is below. Purchase price $77k Cash $17k Line of Credit used $60k Appraised value $105k Rent (tenant has been there 3 years) $1,100

[Trenton Jackson]

You can quit claim the deed back over to your personal names but there is a title seasoning period of 6 months before any traditional lender will do a loan on the house. Any change to title you will have to wait that long.

However you can get a cash out refinance through a Non-Prime Mortgage which will have a higher interest rate than traditional financing but will get you into a 15 or 30 year fixed or ARM option. After you obtain the mortgage then you can quit claim the deed, wait the 6 months and make 6 consecutive on time payments on your new mortgage and then refinance into a traditional mortgage. That would be your best bet.

I could also help you out with this. Feel free to shoot me a message.

[Gloria Mirza]

I have done a cash out refi about 1 month after purchasing a home using a Fannie Mae backed loan, nothing fancy about that. I don't think there is a 6 mo. seasoning period, unless you are talking about some special rule that only pertains to moving title from LLC.