The Quick Read: The ownership clock starts on the date the LLC’s deed was recorded, not on the contract or closing date, and a lender compares that elapsed time to its own cash-out minimum. Across most of the wholesale network Lendmire works with, that minimum is about 6 months, and no law sets it.
- The clock runs from the recorded vesting deed that put the LLC on title.
- Seasoning is lender policy, not statute, so it varies from one program to the next.
- Inside the window, loan sizing usually shifts from appraised value to documented cost.
- A deed into the LLC can restart the clock at some lenders, so ask before you record.
- Passing the time test does not satisfy the rent test, reserves, or the appraisal.
Investors who hold property in an LLC often ask the same question before a cash-out: “Which date counts, and does the entity change it?” The mechanics are simple once you see the order lenders follow. The traps sit in the edge cases, mostly around transfers.
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Lendmire is a mortgage broker that arranges DSCR investor loans through select lenders in its wholesale network, across 41 markets including Washington, D.C. That means it sees many lenders’ versions of this rule side by side. The full picture of how these loans work lives in Lendmire’s complete DSCR loans guide.
Key Terms Defined
Seasoning: The minimum time a borrower must have owned a property before a lender will give cash back against its value.
Vesting deed: The recorded document that puts the current owner on title.
Recording date: The date the county stamps the deed into the public record, which is the date most lenders count from.
Look-through: A lender approach that credits the underlying owner’s time when a property moves into that owner’s own entity.
Restart: A lender approach that treats a new deed into an entity as a fresh start on the clock.
Cost basis: The purchase price plus documented improvements, which lenders use to size a loan before seasoning is met.
What Is the Ownership Clock, and Who Sets It?
The clock is the lender’s own rule. DSCR loans are business-purpose investor loans, so no regulator fixes a waiting period for them. Each program in the network sets its own minimum, and the numbers differ.
On the programs Lendmire places files with, about 6 months of ownership, measured from title recording, is the common expectation for a cash-out. In a BiggerPockets thread on seasoning when BRRRRing, posters describe terms ranging from roughly 90 days to 6 months, with some lenders easing the wait when a rehab is documented. Those are individual posts, so treat them as color, not as program terms.
That spread is the reason to compare lenders on more than the headline wait. Leverage cap, value basis, and the rent test matter just as much. Cash-out refinances on standard rentals top out around 75% LTV across most of the network, and a short wait paired with a tight cap can leave less cash than a longer wait with better terms. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Which Date Actually Starts the Clock?
The recorded deed starts it. A lender orders title, reads the vesting deed, and counts forward from the date the LLC took title. Several other dates look similar and do not count.
| Event | Typically starts the clock? |
|---|---|
| Deed to the LLC recorded | Yes, the usual start |
| Settlement or closing date | Usually no, unless it matches recording |
| Purchase contract date | No |
| LLC formation date | No, the entity can pre-date the deed |
| Application date | No, and most lenders do not measure against it either; they count to the date the new loan funds |
A borrower who applies on day 175 can miss the minimum if processing carries the file past it. Build a cushion rather than aiming at the boundary.
The recording date can differ from settlement by days, sometimes longer when a county is backed up. The title commitment and the recorded deed show the true date, which is why underwriters pull both.
How a Lender Walks Through the Clock, Step by Step
The sequence is consistent across programs, even when the numbers differ.
1. Find the vesting date. The lender orders title and reads when the LLC took title.
2. Compare elapsed time to the program minimum. About 6 months is the common figure on the programs Lendmire places files with.
3. Choose the value basis. Past the minimum, the loan is sized on appraised value. Inside it, many lenders size on cost.
4. Keep the LLC as borrower. On DSCR files the LLC can usually remain the borrower with an individual signing a guaranty, subject to program terms.
5. Run the separate gates. Rent coverage, reserves, credit, and the appraisal each stand on their own.
Step 3 surprises BRRRR investors most. A buyer who paid cash, renovated, and applies early may find the loan sized on purchase price plus documented improvements. Appraised value that exceeds cost does not turn into cash until the clock runs.
Step 5 deserves emphasis. Meeting the seasoning minimum does not satisfy the rent test. Coverage of 1.00 is where many select programs start, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Stronger ratios open better pricing and leverage. Clearing the ratio also does not mean positive cash flow, since repairs, vacancy, management, and capex sit outside the calculation. On credit, a 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers.
Does Time Held by an LLC Count?
On DSCR files, the LLC is the owner, so its time on title is the time that counts. There is no look-through puzzle when the LLC bought the property and has held it since. The question gets harder only when ownership changed hands along the way.
The lender wants proof that the entity on title is the borrower. The usual documents:
- the recorded vesting deed
- the title commitment
- the purchase settlement statement
- the LLC’s operating agreement and good-standing documents
- for a cash buyer, proof of the source of the purchase funds
If the operating agreement is stale, unsigned, or out of step with the current members, expect a condition before the deal works. Lendmire’s piece How a Lender Reads an LLC Borrower on a Rental Cash-Out Refinance covers that side in detail.
Does a Deed Into the LLC Restart the Clock?
It can. A transfer into the LLC is a new recorded deed, and lenders split on how to treat it. Some look through to the owner who held the property before and credit that time. Others treat the new deed as a fresh start. Network lenders do not all answer the same way, so this is an ask-before-you-record item, not a fixed rule.
Picture an investor who buys a rental in her own name and records a deed into her LLC in month five. Suppose the new loan funds in month seven. Under a look-through approach, she has seven months of ownership at funding and clears a 6-month minimum. Under a restart approach, the LLC has held title for two months, so she waits roughly four more. Same facts, two outcomes, depending only on the lender.
Now picture a second investor who buys through the LLC from day one. His clock runs from the original deed with no ambiguity. Holding title in the entity from purchase avoids the entire question.
There is a second problem that has nothing to do with seasoning. Moving a mortgaged property into an LLC can trigger the existing loan’s due-on-sale clause. The federal Garn-St Germain Act protects specific transfers, including some into a trust where the borrower stays a beneficiary, and the provision is quoted on the encyclopedia page for the Act. Investors often assume the protection extends to LLCs. The trust language is narrower than that assumption.
Land-trust workarounds are argued over in investor circles, and the people who use them disagree about whether they hold up. Whether a given transfer is safe depends on the loan documents, so it is a question for a real estate attorney before anything is recorded.
Cash Buyers, Bridge Loans, and Rate-and-Term Refinances
The general rule bends in a few named cases.
All-cash purchase. Some lenders ease or waive the wait for a documented cash purchase, but proceeds generally tie to documented cost, not appraised value. The agency world has a similar concept called delayed financing, described in Fannie Mae’s cash-out refinance section. Agency rules do not govern DSCR files, so the concept is useful as a comparison and nothing more. DSCR terms come from each lender.
Bridge or hard-money purchase. A bridge loan means the purchase was not all cash, so cash-purchase exceptions generally fail. The common route is a payoff-only refinance first and a cash-out later.
Rate-and-term refinance. A refinance that returns no cash faces little or no seasoning at many lenders. On the network’s programs, rate-and-term refinances reach up to 85% LTV, but only with no cash back at closing. Any refinance that returns cash falls under the cash-out ceiling of 75% LTV instead. Cash above the payoff and costs reclassifies the loan.
Short-term rental collateral. Short-term rental cash-outs follow their own tier, with a 70% LTV ceiling for that collateral, a 640+ score expected, and about 12 months of hosting history. Standard rentals cap at 75%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Agency comparison. Agency cash-out rules run two separate clocks, time on title and the age of the loan being paid off, and they are built around individual borrowers. Those clocks belong to a different rulebook, and DSCR lenders set their own terms.
How the Time Clock Shapes the Decision
For an investor, the clock decides whether cash comes out against appraised value or only against cost. That drives how quickly a BRRRR investor can recycle capital into the next purchase. It also decides whether a transfer into an LLC is worth the risk.
A practical way to frame it:
| Situation | Usual move |
|---|---|
| LLC bought and holds the property | Count from the original deed |
| Bought personally, entity wanted | Ask the lender about look-through before recording |
| Mortgaged property, entity wanted | Review the due-on-sale clause with an attorney first |
| Cash buyer who renovated | Expect cost-based sizing until seasoning is met |
| Close to the minimum | Wait, so processing does not push you under |
If waiting costs little, waiting is usually cleaner than a workaround. If a rate-and-term refinance now plus a cash-out later fits the plan, that route can bridge the gap. And if the property is not yet in the LLC, a more affordable fix is often to acquire future properties through the entity from the start.
Eligibility for a cash-out also rests on more than the clock. Loan sizes reach up to $3,000,000 on standard programs, with smaller balances available through select lenders on standard programs, and reserves commonly run about 6 months of PITIA, stepping up to about 9 months above $1,500,000. Reserves vary by lender, leverage, and loan size. Available equity depends on rent used for lender review, the full monthly obligation, reserves, and the 75% ceiling, so it is never a guaranteed figure. The strongest files clear both tests: enough equity and enough rental coverage. Property type matters too. Manufactured homes, log homes, and barndominiums are not offered in the network’s DSCR programs.
Mistakes That Reset or Miss the Clock
- Counting from closing. The recorded deed is the date that matters.
- Deeding to the LLC right before applying. It can restart the clock at some lenders and create due-on-sale risk.
- Applying on the boundary date. Funding, not application, is usually the measuring point.
- Stale entity documents. An outdated operating agreement slows the file.
- Comparing lenders on seasoning alone. Value basis, leverage cap, and coverage matter as much.
- Assuming the LLC removes the wait. It changes how ownership is documented, not how long you must hold.
Lendmire’s piece How a Lender Reads an LLC Transfer on a Cash-Out Refinance covers the transfer side of this same count in more depth.
Program terms are subject to lender guidelines, every file is underwritten individually, and nothing here is a commitment to lend.
This article is general information, not legal or tax advice. Consult a qualified attorney or CPA about your own situation, especially before deeding a property into an entity. Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Does my LLC’s formation date matter?
No, the formation date does not start the ownership clock. The recorded deed that put the LLC on title does. An entity formed long before the purchase gets no extra credit, and one formed shortly before the purchase carries no penalty.
Can I deed a property into my LLC right before applying?
You can, but it carries two risks. Some lenders treat the new deed as a fresh start on the clock, and a transfer on a mortgaged property can trigger the existing loan’s due-on-sale clause. Ask the lender about look-through treatment and have an attorney review the loan documents before you record anything.
Which date do I count to, application or funding?
Count to the funding date, since that is when the new loan actually disburses. Leave a cushion beyond the minimum so that a slow file does not push you under it.
Is the seasoning period a law or a lender policy?
It is lender policy. DSCR loans are business-purpose products, and the agency rulebook that sets cash-out waiting periods for conventional loans does not apply to them. About 6 months is the common expectation across most of Lendmire’s network, but individual programs differ.
Can I skip the wait if I paid cash?
Some lenders ease the wait for a documented cash purchase, though proceeds are generally tied to cost rather than appraised value. A purchase financed with a bridge or hard-money loan generally does not qualify as cash. Terms depend on the lender and program.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
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References
1. BiggerPockets, Seasoning Periods when BRRRRing
2. Garn-St Germain Depository Institutions Act
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a DSCR Lender Finances a Rental Bought With Cash-Out Funds · How Lenders Underwrite a DSCR Cash-Out Refinance With Only Six Months of Reserves · Can You Use a DSCR Cash-Out Refinance to Fund a Private Lending Deal?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.