All Forum Posts by: Account Closed

@Ryan Keenan

This is a strategy I am going to implement once the opportunity presents itself. I have spoken to at least 3 different people who are doing this. Here it is:

Create an LLC and have the LLC lend you a mortgage on the property you are receiving. The reason why this works is because instead of you needing cash or receiving a cash out loan, we are now refinancing a loan – your loan. There no reason to wait any time or have any "whichever is lower" rule come into play. We are just refinancing a loan. Here's how it works:

You create an LLC. You buy a home. Your LLC gives you a loan for the home. You file the deed for that loan at the county courthouse. You use the money from the LLC to buy and fix up the property. Once the property is completed, your conventional lender comes to refinance the loan. Your conventional lender runs title and sees there is a loan. Your conventional lender refinances you into a new loan, and cuts a check to your LLC in the amount of 75% of the value. Please don't confuse this 75% with a "cash out" amount. The non-cash out LTV on a refinance is also 75%. We are refinancing a mortgage. Your LLC's mortgage. Essentially your LLC has become the bank/hard money lender/etc. However you want to think about it. You get to set the interest rate (it can be 0%) and you get your investment amount back sooner. Some things to think of:

To file a deed at the county courthouse is $100-$150 in cost (depending on which county) And you want that note to be pretty close to 70% of the ARV for the property if you don't want to bring any money to closing. 70% will allow you to roll in your closing costs. If you want it to be at 75% just keep in mind you would need to bring your closing costs out of your pocket to complete the refinance.

Hope this helps...

@Kurt Brauner

How did your trip go?

@Andre J. 

I would read the response from @Rumi Tever

I would recommend you find a good PM in the area that would be able to help you  with that all the way from California.

All the best...

@Todd Dexheimer

See my post above...

@Rebecca Knox

It’s easy to do when you meet awesome people! Hope all is well in MKE! 

@Thomas Y. 

You may want to reach out to @Rebecca Knox 

She is putting an event together that may be very beneficial to you in the Milwaukee area. 

All the best...

@Daniel Smith I'll tell you what I am going to do (haven't quite go the opportunity yet):

Create an LLC and have the LLC lend you a mortgage on the property you are receiving. The reason why this works is because instead of you needing cash or receiving a cash out loan, we are now refinancing a loan – your loan. There no reason to wait any time or have any "whichever is lower" rule come into play. We are just refinancing a loan. Here's how it works:

You create an LLC You buy a home Your LLC gives you a loan for the home. You file the deed for that loan at the county courthouse. You use the money from the LLC to buy and fix up the property. Once the property is completed, your conventional lender comes to refinance the loan. Your conventional lender runs title and sees there is a loan. Your conventional lender refinances you into a new loan, and cuts a check to your LLC in the amount of 75% of the value. Please don't confuse this 75% with a "cash out" amount. The non-cash out LTV on a refinance is also 75%. We are refinancing a mortgage. Your LLC's mortgage. Essentially your LLC has become the bank/hard money lender/etc. However you want to think about it. You get to set the interest rate (it can be 0%) and you get your investment amount back sooner. Some things to think of:

To file a deed at the county courthouse is $100-$150 in cost (depending on which county) And you want that note to be pretty close to 70% of the ARV for the property if you don't want to bring any money to closing. 70% will allow you to roll in your closing costs. If you want it to be at 75% just keep in mind you would need to bring your closing costs out of your pocket to complete the refinance.

Hope this helps...

@Chandler Harker why do you want a loan using an LLC?

How about using your LLC to personally loan you the money, file a deed in that city and when you are done with the rehab refi that loan so your LLC get paid off. Then just transfer the property into your LLC.

It's the strategy I plan to implement.

All the best,

@Antoine Martel when is your next meet up?

@Derick Harris

Welcome to BP! 

If you have a Facebook account look up Brew City Real Estate Investment Meetup. Lots of good connections there. You may want to reach out to @Rebecca Knox to have you added. 

All the best...

@Josiah Kay

Yes I am looking in Milwaukee as well.