Posted by Michael Morrongiello on November 03, 2005 at 13:17:53:
On an investment property that was just acquired by an LLC newly formed it will be difficult to pull out a large cash sum through a traditional refinancing.
So, WHY not sell the property? This gets your cash equity out and also allows you to realize a profit today. You can sell to a buyer who might obtain their own financing to purchase the property (but then again they in turn may also run into the title seasoning of ownership issues) OR you can elect to SELLER FINANCE the sale to prospective buyers.
The “paper” you would carry back could then be converted into a lump cash sum. Again this gets your equity and profit out.
In the future WHY NOT negotiate a deal with a modest down payment to buy the property from a motivated seller right into your LLC and have the property seller also SELLER FINANCE your LLC. The seller then if they still desire, need, want, cash can sell off their seller finaced “paper”- Now under this scenario the LLC owns the property and the financing is ALREADY in place.
You now avoid the dilemma you are faced with in trying to accomplish a traditonal refinancing of the property shortly after your acquisition to get your cash out.