Cash-Out Refinance Before or After Putting Propert under LLC?

[Brian Braddock]

We've rented a SFH in Texas for about four years now and want to take advantage of the equity. We're planning to do a cash-out refi but our CPA also suggested that we transfer the deed to our LLC's name for proper legal coverage. Does this need to happen before or after the cash-out refi? Is there any real benefit to doing the refi at a certain time in relation to the deed change? Thanks in advance!

[Carl Fischer]

@Brian Braddock

I would do it before it is in the LLC. You will have to guarantee it either way unless you can get the bank to do non recourse loan but that will be a higher interest rate. More banks will give you a better rate in your name vs an LLC.
When you retitle the deed Many people will tell you the “due on sale” clause may cause you problems with the loan being called-I think that risk is low. It is tough enough getting cash out refi, at a decent rate, these days especially on rental property. The LLC just adds a level of complexity.