Refinance my rental property

[Joel Barjon]

Hey guys,

I hope everyone is doing well. Can someone help me with that question: will a bank refinance a rental property under llc? If not, what will you suggest me to do? I will appreciate your insight. Thank you.

[Nate Herndon]

Quote from @Joel Barjon:

Hey guys,

I hope everyone is doing well. Can someone help me with that question: will a bank refinance a rental property under llc? If not, what will you suggest me to do? I will appreciate your insight. Thank you.

Good morning, Joel - 

What you are describing is a very common practice on the private lending side of the financing industry. Whether it be a fix-and-flip loan or a 30-year fixed DSCR loan, nearly all of the clients that I work with will opt for closing in the name of an LLC.

As you may know, closing in the name of an LLC prevents the loan from reporting on your personal credit as a tradeline (unless you default on the loan). I have investor clients with 40-50 loans that they have completed with me and not a one is reporting as a mortgage on their credit. Additionally, they've avoided 40-50 hard credit inquiries populating on their credit as a result of the soft credit inquiry that we utilize for DSCR loans.

If DSCR loans are a new thing to you, I would recommend checking out some articles here on Bigger Pockets or giving me a call to learn more. Always happy to discuss the ins and outs. DSCR loans underwrite to the income of the property, and do not require your personal income, taxes, debt-to-income ratio, etc.

Of the 1,100+ loans that our team closed last year, I want to say that only 1% to 2% of those were closed in a borrower's personal name.So, it is pretty irregular for us to process an investment property loan under a personal name.

Clients usually opt for closing in their personal name if they simply do not have an LLC established yet.