A two individual comprised LLC would like to refinance three rental properties that have doubled in value and take some cash out. Because one of the two LLC partners has two many other loans in their name, the mortgage broker came up with the idea to have one of the partners (who qualifies financially) to take the loan(s )out in their name solo. In order to do this the title of the three rental properties would have be taken out of the LLC, put in the qualified persons name, then at a later point put all three rentals back into the LLC. Questions:
1) is this legal in Calif? 2) would this create a taxable event for the qualified person 3) does all liability of loan remain with the qualified person thru the term of the loan 4) how would the LLC track the loan, depreciation, mortg etc 4) why would the qualified person do this?
