Cash Out Refinancing to purchase a new property.

[Bellman Tumasang]

I'm going to use an example to make things easier assuming I have a real estate holding company called Holding LLC which 100% owns and manager manages Property 1 LLC and Property 2 LLC which own Property 1 and 2.

Let's say I bought property 2 for $500k with $100k down and financed $400k. After a couple years it's worth $600k and my remaining loan balance is $350k. If I refinance Property 2 at an 80% LTV with it being worth $600k the new loan would be $480k and after paying off the old loan balance of $350k I should have $130k.

However, that $130k I may want to use it as a 20% downpayment for a $650k property. Since the equity pulled out is payed to property 2 LLC and I want to purchase Property 3 and create Property 3 LLC could I purchase Property 3 where Property 3 LLC is funded by the $130k downpayment from Property 2 LLC then transfer the ownership of Property 3 LLC to Holding LLC so all properties are completely separate.

Or could I just simplify and pay the $130k from Property 2 LLC to Holding LLC then use that $130k from Holding LLC to fund Property 3 LLC to purchase Property 3 and have Property 3 LLC 100% owned and manager managed by Holding LLC.