Cash out refi in an LLC

[Javier Sanchez]

I currently have a rental property that is fully paid off that I am looking to refinance under an LLC. I have a mortgage broker that can support a cash out refinance where the title would remain under the LLC, but the loan would be under my personal name and credit. Does this make sense? Is there anything I need to consider that I am not thinking about? Is there risk to this?

I am starting to explore my options from a commercial loan standpoint as well...just in case.

Would greatly appreciate insight from the group on this. Thank you in advance!

[Kevin Sobilo]

@Javier Sanchez, I just did exactly this so maybe I can answer.

A local lender I was talking to had a couple options for me for a portfolio loan which is a loan the bank will keep and not resell like a conventional fannie/freddie loan.

The first option was through their commercial department and it was a 20 year adjustable rate loan at 75% LTV. This loan would be in the LLC's name with me personally guaranteeing the loan (like being cosigner). So, it does not show up on my personal credit.

The other option was through their residential department where I could get a 30 year FIXED rate loan at 80% LTV. The property would stay owned by the LLC, but the loan would be in my personal name. So, it does show up on my personal credit.

The more favorable terms with the longer term, better LTV, and fixed rate (with rates being so low) seemed like an opportunity I wanted to take advantage of. Having this loan on my personal credit isn't a hardship, but I wouldn't want all my investment loans on their. A few would be ok though.