Multi-member llc BRRR

[Stephen Rager]

Bob & Joe, located in Indiana, go into business with a fix and flip LLC an estimated 10 properties a year and BRRR 5. The partnership agreement is to split profits 50/50. We are newer to the business so we are flipping to create cash for funding better opportunities with investing later. BRRR by the book has a better structure because of the taxes paid on the fix and flips.

If we cash out refi properties in the LLC, the bank will only offer us commercial loans for 15 or 20-year terms at higher interest rates, roughly 5% adjustable. Verses personal cash-out refi's that we get now as individuals at 30-year loans with roughly 3.5% loans, plus my bank told me I could only cash out 3 properties.

The loan numbers do not look as good as the LLC structure as personal loans.

How can we fix them up to transfer them to ourselves personally out of the LLC to BRRR them to get the longer 30 years loans? Or if we BRRR them in the LLC how can we transfer them out to ourselves personally after some years?

Is there a way to convey them to minimize tax consequences? 

We have a good working agreement in place now and complement each well.  We know it won't last forever though so we have to develop an exit strategy.  

Thank you in advance, 

Stephen Rager

[Gary Parilis]

Why do you need an LLC in the first place? Why not just do it all in your personal names, as owners and borrowers?