Moreover, Meiers explicitly stated that "The question [of what allocation is appropriate] is purely a factual one".

@Viswanathan RaghuramGo to IREM.org search for ARM certified property managers.

Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbookTo find out about an area go to IREM.org search for ARM certified property managers.

Based on my research an arms-length documented loan is better rather than a capital investment into the LLC, correct?

A transfer of ownership regardless of whether it is arms-length or not would cause the note to be called due.As for transferring any property to some other entity and then not recording officially, my understanding would be that would not be a proper transfer and any liability would be on the party who was the owner of record at the time of an incident or claim.

Your answer might be, it depends on so many factors.Before you give me your opinion,  here are some details of the deal, I have few debt free rental houses that i want to cash out to purchase another rental house.in m...

Armed with that information, make the call.

or should I keep it in my LLC and get 6% 5/1 ARM over 25 years?

We have been shopping around with the local lenders and were approved for one commercial loan with the following terms: 25% down, 4.95% fixed for 5 years, then adjusted based on 5 year treasury + 3.5%, amortized at 15 years.Other local lenders have higher interest rates at ~5.75%, but base their adjustable rate loan on the prime interest rate + 1%.Obviously, we are trying to find an approval with a longer amortization to improve cash flow, but all other things being equal, should I even worry about the index the ARM is tied to (ie 5 year treasury vs prime)?

I am facing a hard money penalty now so working through that piece and working with a bank on a 5/1 arm to see if we can do a commercial 5/1 arm cash out refinance.Not sure where else to turn on this as I don't understand that Freddie Mac / Fannie Mae guideline at all.