BiggerPockets

Huge Mistake You Don't Want to Make!

Thursday, January 15

Many investors have purchased an investment property in their personal name and then transfered the title into an entity such as an LLC. This process has been done time and again. Some investors have forgotten an important aspect when using this strategy. When they purchased the investment in their name, the insurance policy that was purchased for it was also in their personal name. Once the title is transfered to an entity such as an LLC, you MUST remember to contact your insurance carrier and transfer the name of the insured to the entity. Failure to do so could have catastrophic results.

If you miss this step, and your investment burns down, the insurance carrier would have every right to deny your claim as YOU don't own the property anymore (as YOU are listed as beneficiary of the policy), your entity does!

Comments

1. James Miller Reply
   about 3 years ago

   Great post. I haven't transferred a property like this yet, but have considered it as the interest rate advantage you can get by getting the mortgage in your own name vs holding it in an LLC can be considerable.

   The same could be said for properties being taken over "subject to" the existing mortgage.

   This would be too easy of a thing to overlook.

   James
   http://www.realestategozone.com/
   http://realestategozone.wordpress.com/

Post a Comment

Your Name:
Your Email:
	Subscribe to comments?