Refinancing using my own LLC to expedite?

Question

I have recently BRR'd a property and am on to the refi portion.  Last time I refi'd an investment property, it was a long painful drawn-out process.

I have read comments regarding your own LLC (not the same owning the property) have a 1st position lien on said property. That way when you refi (in my personal name of course), the new bank cuts the check to pay off the "existing" mortgage. I'd like to know what the mechanics are of this strategy and its pitfalls.

Anyone care to share?

Thanks!

Jeff P. · Answer

@Andrew Postell yep! That’s it. I have a question which I will ask in that thread.

Thanks!

Andrew Postell · Answer

@Jeff P. are you talking about this strategy HERE?

Matt Hurley · Answer

I'm not a lawyer, but that sort of sounds like you might be ending up in mortgage fraud territory. Transferring funds from one LLC to the other under the guise of a refi. Why would you not just refi under the first LLC then quit claim deed the house over? Have you discussed this with a RE Lawyer?

Jeff P. · Answer

I think there is a misunderstanding. My fault. I don't wish to refi the property into an LLC name.

Rather, I would have a company that has a 1st position lien on my property. I would refi the property just as you would as if an HML had given you the money to purchase the property. Refi-ing with a traditional bank/credit union then would give me better terms. The rub is that: I own the company that has the 1st posiotion lien. I am sure I've read this strategy on BP in the past, but can't find info...

Justin Kane · Answer

you can refi into a llc, you need to hunt for the right bank, CU, lender, broker to help you identify the best option.. its going to take time and a lot of phone calls but thats the business youre in