Cash Out Refi Options

[Minh Cao]

Newbie here and need some advice. Here is the scenario:

My partner and I have a contractor's license and our goal is to buy land, construct multi-family and hold onto the investments so we created an LLC for the development/construction company.

Back in March I bought a duplex under my name and have finished the repairs and both units are leased. One with a 6 month lease and the other on a year lease. Property is owned free and clear.

Questions are with our particular goal in mind:

Do I try to cash out re-fi under my name or transfer to LLC and then re-fi?

What are the max LTV for each option?

Any suggestions on lenders in Florida?

Thanks.

[Alex Chin]

Hello Minh,

What John Farley above said is correct. For non-conventional lenders, right now 70% of appraised value is the limit for cash-out, although we are starting to see signs that that may push a bit higher in coming months. On a rate-term or purchase loan, you can get financing at 75-80% LTV.

For both loan types, interest is generally in the 6s with the actual rate heavily influenced by LTV, and it will usually need to be rented and cash-flowing at at least a 1.2 DSCR, as well as being held in an LLC or similar entity.