Refinancing Two Rentals from LLC to Personal Name

[Chad Mayo]

I currently have two properties financed under my single member LLC with 5/20 rate with balloon. (Balloon is due three years from now) I am interested in taking the properties out of the LLC to get the better 30 year fixed rate and cash out about $20k from one property. I would then get an umbrella policy for the two rentals. I have three properties total (2 rentals and 1 personal) I plan to buy more investment property in the future but probably not for another year or so.

My wife and I are 40 with three small kids. She plans to open a medical clinic within the year as a nurse practitioner but that would be under a newly formed LLC at that time with just her as a member. It is my understanding that the umbrella policy would provide the protection I need at this point. I like the mindset of having the properties in the LLC and "away" from us personally but is it wise? I'm also worried that the investment mortgages would now be on our personal credit reports and have a negative impact....is that true? Any advice is appreciated.

[Jaysen Medhurst]

@Chad Mayo, the titles to the properties are under the LLC, but what about the mortgages? Are you the personal guarantor? If so they're on your credit report. This isn't necessarily "negative," if you have good cash flow.

Before switching title, etc. I'd research the loan products at all of your local banks and credit unions. Call each one, tell them what you're trying to do, and see what they offer. You only have to find one that has what you're looking for. One of my local CUs offers 4.7%, 30-yr on 1-4 unit investment properties and title can be in a LLC.

[Chad Mayo]

@Jaysen Medhurst Everything is in my LLC's name and I am the personal guarantor. However, I have not see investment properties on any of my credit reports. Perhaps I missed it but they do cashflow.

Thanks for the advice....that would be nice if I can find a 30 yr mortgage and keep them under LLC.

[Jaysen Medhurst]

@Chad Mayo, looks like Louisiana Federal CU does them. Good terms, too.