Be your own hard money lender through your own LLC?

[Andrew Neal]

So a few months back on a different thread @jorge ruiz brought up this idea and I was curious if anyone has does this or if it's possible.

You create an LLC. You buy a home. Your LLC gives you a loan for the home. You file the deed for that loan at the county courthouse. You use the money from the LLC to buy and fix up the property. Once the property is completed, your conventional lender comes to refinance the loan. Your conventional lender runs title and sees there is a loan. Your conventional lender refinances you into a new loan, and cuts a check to your LLC in the amount of 75% of the value. Please don't confuse this 75% with a "cash out" amount. The non-cash out LTV on a refinance is also 75%. We are refinancing a mortgage. Your LLC's mortgage. Essentially your LLC has become the bank/hard money lender/etc. However you want to think about it. You get to set the interest rate (it can be 0%) and you get your investment amount back sooner.

One thing that makes me think this may not work is the fact that you own the LLC and also are purchasing the property? Maybe @Chris Mason has some knowledge to drop.