Little help and point me in the right direction please.
I bought a house under LLC. I got a personal loan and transfered all the money to the LLC as opening equity in LLC.
So the LLC owns the house outright.
Now I would like to finance a purchase on a 2nd house using the equity in the 1st house.
So far conventional lending has shot me down because the LLC is only 3 months old.
Has anyone done something like this? How did it work?
Is hard money the answer? Even possible for longer term on hard money?
Just to clarify- the prop is titled under the LLC and is owned free and clear. Are the lenders telling you that you can’t pull out equity because LLC is too young OR because of title seasoning issues? That was my first thought that maybe you’re running into lenders with longer title seasoning requirements…
I’ve heard that getting HELOCs is getting harder and harder (just like most financing these days) but there should be somone that will still do it, have you been calling small local banks? I’ve had the most success with the really small local guys lately.
We’re about to do the same thing. We have a closing tomorrow on one house. We were going to roll in a loan on the house we bought for cash a few months ago, but due to some issues, incompetent people, etc - we will have to roll that one into a loan with the one we’re closing on the middle of next month.
So here’s how this is going to work out. Our LLC bought a property free and clear back in March. We’ve rehabbed it and now it’s worth about double what we’ve got in it. We have this other property under contract for $15K and it will need approx. $10K in repairs. When we close on that property next month, we will get a loan for the purchase price and repairs for the new property and also a loan for our free and clear property for the amount we have into it. We’ll have good equity in the property that the LLC now owns outright. So in effect we will have 100% financing for both properties thru a local bank. The loan will be a commercial loan at 6.5%, 5 yr fixed rate, 10 yr amort.
Stanfield,
What you need to do is go to a local bank and ask to speak with their commercial loan officer. Tell them you would like to cross-collateralize a property you currently own free and clear to assist with the purchase of another property.