Newly created LLC's using the BRRR

[Alan Daniels]

Happy Pre-Thanksgiving to everyone!  Lots to be thankful for!

I am under contract with a property I am buying subject to existing mortgage and also giving the seller a promissory note for $10k over 5 years. My plan is to fix it up, rent it out, and refi once tenants are in and house is fixed up. I need to recoup most of my $35k rehab expense thru a cash out refi. The property is being bought for $100k and ARV is around $200k. Current mortgage bal is $90k, 4%, with 23 yrs left, which is a great mortgage to have, but with the rehab needed, I was hoping to recoup those funds in a refi, even if I have to give a point or two on the rate.

I am concerned that a bank may not refi to an "LLC", or either give me a horrible terms. Before reaching out to banks, I knew BP community would probably have more unbiased knowledge & experience to share than any bank I reach out to.

I greatly appreciate everyone's time and thoughts!

All the Best!

Alan

[Andrew Postell]

@Alan Daniels can certainly help in this area but I wanted to be 100% sure of what is transpiring here:

• You have a loan for $10k on the home
• You also have a loan for $90k on the home?
  • Do I have those right?
• You will also be spending $35k on rehabbing the home

If those 3 things are right, you will have a first lien of $90k, a 2nd lien of $10k?  Let me know if I have anything incorrect because that will help me tell you what to do next.  Thanks!