Home Equity Loan or 'sell' my Condo to a self-owned LLC.

[Mark Edmunds]

Hi All - I would be thankful and Interested to hear your informed opinions.

I am looking to release $100K on my condo (to use for a new purchase) and am interested in the most cost efficient way to do this. I currently owe $400K at 3.5% 30 yr fixed. (29 years left)

I bought property for $525K but now value is $700K.
I already rent out 2 rooms which essentially covers mortage payments.

I'm considering the following options...

Option A -
Take out a 30 year fixed home equity loan (I assume a couple of percent points above current mortgage rates)

Option B -

Start an AMC LLC.
AMC LLC apply for 30 year mortgage from Bank. (guestimating 4.5% )
Sell Condo from myself to AMC LLC.

I'm thinking that Option B be a more cost-effective way to

a) release equity
b) write off all costs associated with renting out the condo. (Mortage Tax, Maintenance, Asset Depreciation, Maintenance Tax, Property Tax)

Note: If I executed Option B I would not live in the condo myself (i.e rent out the third room) but rent the third bedroom.

Am I missing anytihng important with option B? Is it less clear cut as to which option would be better. Are there more risks with one option than the other?

Thanks for your time and expertise.