Refinancing a Cash Purchase Question

[Stacy MacLean]

Hi!  We are really excited about our very first purchase after learning about and doing all our research on Bigger Pockets, but we need a little help figuring out how to structure this and thought someone here on Bigger Pockets may have been through it and can hopefully help...

What we are trying to do:

We have an accepted offer for a cash purchase on a rental property.

The offer is in only one of our names (so only one of us will be on the deed).

There are two of us who will be contributing cash equally to the purchase.

Once it closes, we will want to refinance it - in just one of our names.

How we would like to do it:

Create an LLC with an associated bank account.

Each of us will deposit half the amount required for the purchase.

We will close on the property using the cash from that account that came 50/50 from each partner.

Then we will refinance, but again, only in one of our names (so we still retain more future lending opportunities with the other partner).

Questions:

From what we understand, the funds still have to be "sourced" when we refinance. Some have told us this means that the contributing partner who is not named on the deed will have to either gift or loan the money to the partner whose name is on the deed.

We've also been told that's not the case, and because all the money was put into the LLC's bank account that it's the LLC buying it even though, when refinanced, the deed will only be in one name. Still will have to source the funds because they were in the LLC bank acct less than 60 days, but no "loaning or gifting" of the funds required.

We are trying to set it all up correctly from the get go so we don't have any trouble turning around and re-financing it.

Does anyone have any insight how to best accomplish this and if we are on the right track?

Thanks in advance for any help!