BiggerPockets

ok guys just to make sure i got this straight this is how it goes.
I own 4 properties that i want to transfer to my LLC, so what i would need to do is quit claim properties into LLC then after that follow up with my ins policies and transfer those into my LLC correct. Also will i need a lawyer to do the quit claim or can i do it myself. I called stewart title co and they require a lawyer for quit claims deeds.

Hello Bill nice to meet you ,thats what im gonna do instead i'll just file it myself. Still learning everyday....

yes then in 3 years when interest rates go up to 8-10% see if they call due on sale then.

I would be very interested to hear from as many people as possible on this issue. We have been going around and around with our CPA and RE Attorney about whether or not we should transfer our buy-and-hold properties into an LLC because of the concern about the due-on-sale clause. What are people's thoughts/experiences on this issue?

Thanks for the response Bill. Good points. We were leaning in that direction, so this confirms it.
Kim

I've been studying this as well. My understanding is the transfer of title into a land trust will NOT trigger a due on sale clause provided the transfer is into an inter vivos trust, i.e., the borrower remains the beneficiary of the trust (Garns - St. Germain Act 1982).

However, the DOS clause could be triggered if that beneficiary is changed. But since a change in beneficiary is not recorded, unlike the change of title, it would be up to the mortgage company to figure it out.

It sounds risky on the surface, but the more I look into it, the less likely it seems the lender will figure it out. After all, they have more pressing matters to attend to, like foreclosing on non-performing assets, than chasing down the beneficiaries of every trust taking title to property. And they're not too bright anyways (as institutions, I'm not talking about individuals). :wink:

My big question about land trusts is privacy concerns. Sure, public records will now show your property as being owned by some obscure trustee, but won't the grant deeds/quick-claim deeds that you signed to re-convey the property over to the trust also be public record? It seems anybody with half a brain will see, "Hmmmm, 123 Main Street has been owned by ABC Trust since 2004. I also see a Mr. Steve Stevens transferred that property over to ABC Trust. I'll bet Mr. Stevens is the beneficiary!"

I'm also wondering if the reverse is true, i.e., an asset search for Mr. Stevens fails to uncover any current assets, but if the deeds that transferred any property into a trust can be found, it might be assumed (and investigated) that he is still the beneficiary of those trusts.

Any thoughts or experience with this??? Thanks all. Just loving this forum.