Property in 2 member LLC now what

[Daniel Suarez]

My partner and I bought a property cash under an LLC with the idea to BRRRR it. We fixed it up and rented it for more than 6 months now but realized that LLC interest rates are very high. So I'm looking at a couple of options

a) Refinicing the property under our names and transfering it back to the LLC after (that would mean having another loan under my name and being 1 loan away from the loan max for a very small value, 50k)

b) Allow him to buy me out of the LLC with a 50% ARV payment and he can refinance the property himself (not sure how that would work with taxes, I can ask my CPA) or keep the LLC under his name. I'm not sure what the legal procedure would be.

c) Let the LLC sell the property to him personally and devide the earnings half and half.

I would love to hear people's thoughts and maybe someone who did this before.

Thanks in advanced.

[David Gotsill]

@Daniel Suarez - 

You mentioned that the loan amount is not that large.  If that's the case, even though the interest rate is "high", the actual amount of interest payments may not be that much higher than if the loan were at a lower interest rate.  Options (a) and (c) that you mention each involve an actual transfer/closing, with all of the accompanying costs.  I'd take a close look at what you actually stand to save when considering all costs.  

For example, if you're dropping from an 8% to a 5% on a $50k loan, that's roughly a difference of $1,500 per year in interest payment.  If your transfer/refi/closing costs are going to be in the order of $5 or $6k, then that eats up nearly 4 years of the "saved" interest payments.  You might consider riding it out a bit, in part to pay down the loan and in part to (hopefully) ride some appreciation.  This would allow you to enjoy the fruits of your labor for a while before taking the hit on transfer costs.  

Not that I'd necessarily recommend this, but you could also consider paying down the loan on an accelerated rate (for example, all cashflow goes to principal until paid off), and in that way in short order you two would hold the property and open up your loan slot.