All Forum Posts by: Leo Poon

Originally posted by @Stephanie Medellin:

@Leo Poon  Are you simply trying to refinance to improve rate/term of the loan, or are you trying to pull cash out?

 Trying to cash out at 100% purchase price with no seasoning 

@Alex Deacon The idea is the same as traditional BRRR strategy where you buy 20-40% below market value that requires major rehab/some rehab/cosmetic only/or turnkey, and include those cost when the spouse purchase the LLC's property. If the purchase price is 100k, rehab cost is 10k, then the spouse would buy it for 137.5k. The only double closing cost that would be incurred should be an attorney's fee and title fee. Loan cost would be the same because it is just the same as refinancing.

@Jason D. I haven't seen a lender that would do 100% cash out on delay financing within 2 weeks. I think all lenders, even the private non-GM lenders do 70% of the purchase price within 2 weeks of closing. If you know any lenders that can do 100% cash out delay financing within 4 weeks period time, please do share.

Hi BP, I am thinking if a husband‘s LLC purchase a property all cash for 100k. Instead of waiting 6 months to refinance for 80% of ARV to pull the cash out. Can the wife purchase the LLC’s property at 130k given she put 26k down which is 20% down payment and finance the 104k through a Non-QM within 2 weeks of the LLC closed on the property. Thus, giving the LLC back the original investment of 100k, the 4k surplus can go toward covering the closing cost. The husband can also substitute the wife with his family members or friends that he trust if lenders would not lend to the wife because seller and buyer are spouses.

Originally posted by @Stephanie Medellin:

@Brandon Motuk Yes, if you're interested in a conventional loan you will have to take the property out of the LLC and refinance in your own name. However, there shouldn't be an additional seasoning period required after transferring it to your name unless your lender has an overlay.

The following was copied from Fannie Mae guidelines for cash out:

If the property was owned prior to closing by a limited liability corporation (LLC) that is majority-owned or controlled by the borrower(s), the time it was held by the LLC may be counted towards meeting the borrower’s six month ownership requirement. (In order to close the refinance transaction, ownership must be transferred out of the LLC and into the name of the individual borrower(s). See B2-2-01, General Borrower Eligibility Requirements for additional details.)

What if my wife owns 100% of the LLC which owns the property, and I purchase the property from her LLC. Can it bypass the 6month seasoning requirement?

I read about @Andrew Postell post on cashing out by putting a lien on your property with your LLC. The post's link is here. 

Let say the house purchase price was $100k. During the closing date, you close with your 100k cash, and at the same time you use your LLC to mortgage to yourself for $100k and record the lien at the county courthouse without actually transferring the money between the LLC and you, just filing the lien is good enough.

Your LLC now has a lien on your property, and you can refinance the 100k "mortgage" with another lender without the seasoning period because the lender sees this as a refinance instead of delayed financing.

Anyone who has done this strategy or lenders can shine some lights on this for the community? 

Originally posted by @Basit Siddiqi:

@Liam OSullivan

Welcome to Biggerpockets!
Welcome to New York!
Welcome to real estate investing!

As you may have figured it out - it is difficult to invest within the 5 boroughs of NYC. You need money and a good chance that the property will not cash-flow.

I have seen posts of New Yorkers deciding to invest in Hudson. You may want to use the search function on BP to see who the players are.

Do you have any tax questions for the time being?

I have one :). If you fund your LLC to purchase a property with HELOC, and later cash out refinance to return the purchase price back to yourself. Is the interest on the mortgage tax deductible if you are on the loan instead of the LLC is on the loan?

If it is a turn key operation and not doing value add, I think the investor can buy the property on his own.

Hi people, is there any portfolio lender that will do a 100% cash out on day 1 if the property was purchased with cash?

@Frankie Betancourt Did you do a background check and credit report on him yet? What if he turns your house into a drug house or some veggie planting operation? No tenant is better than bad tenant.

Originally posted by @Frankie Betancourt:

hello i won a house at auction  and there was squatters or people already living there not original owner and they already started fixing up the house  Cause they need a place to stay and asked if i can help them fix it by buying stuff and when everything is running they will start paying me rent does this sound like a good idea?

 Imagine if this squatter gets hurt fixing your property, and you acknowledged his presence at the beginning, you will probably be liable for a lot of things. Don't get tempted for free labor for fixing your property, you might end up paying a lot more at the end if that squatter is doing it all wrong. I once heard "the most expensive thing is free".