Brrrr with a partner attached to the property

[Michael Steele]

Hello BP members. Looking for some guidance. I recently purchased a rental property with a partner 50/50. I would like to refinance but my partner wants to continue buying property out of pocket. Is it possible for me to refinance my half of the property so I can get my money back out to purchase another? It is currently stable with a tenant and should appraise for much more than we have into it. Any input would be greatly appreciated. Thank you!

[Paul Cijunelis]

Quote from @Nate Herndon:

If you plan to take full control of the property, you could refinance in your name/entity alone with a cash-out and pay your partner off with their equity share. The max LTV available will range from 75-80%.

I assume you guys likely created a new LLC and set it up with each of your ind LLCs as 50/50 owners? Read your documentation to see what was agreed upon at the time you formed it. As Nate said, one of your options is to take over the property completely.

Another option is to educate your partner. Your situation is unique and so is your partner's and we don't know what it is. Does partner have more cash money than you? Older and less interested in risk/debt? Etc? What is your unique situation. Figure that out and approach your partner with the goal of education and discussion rather than argument. Why does partner wish to stick with cash only? Discuss COC return, run a financial analysis for him and a performance chart showing the ROR after multiple properties have been acquired and cashed-out... good luck.