Purchasing a property and taking title.

[Bellman Tumasang]

Let’s assume I own Property A and B.

Let's say I have a real estate holding company called Blue Capital LLC which 100% owns and manager managers Property A LLC and Property B LLC which take titles to the properties.

Let’s assume I go to a lender and get a property appraisal for Property B, do a cash out refinance and pull out $200k of equity. Let’s say I have a deal for $1m called Property C and I want to use the $200k as a downpayment and finance the remaining $800k.

Could I pay the $200k of pulled out equity from Property B LLC to Blue Capital LLC then use the money to create and contribute to Property C LLC and purchase Property C so that Property C LLC is 100% owned and manager managed by Blue Capital LLC. Or would the $200k become taxable If distributed to Blue Capital LLC.

To potentially get around this, with the $200k remaining in Property B LLC could I create Property C LLC and have that owned by Property B LLC 100% owned and manager-managed then contribute the $200k to Property C LLC to use as a 20% downpayment to purchase Property C. Once that's done can I transfer ownership of Property C LLC to Blue Capital LLC so that way Blue Capital owns 100% and manager manages Property C LLC.

I believe this structure will keep all assets separate and organised and maximise asset protection while minimising liabilities.

Any comments or opinions please state below.