Assigning a property to an LLC

Accountant · Houston, TX · Member since 2008 · 5 posts · 0 votes

My business partner and I recently purchased a property in our names. We would like to assign the property to an LLC where we are the only two members. In the bank note, it says if we assign the property without the lenders permission that the bank could call the note. Any advice on how to get the property into the LLC?

0 Reply

63 views

Most Popular Reply

Account Closed

Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes

19y

Originally posted by "RECPATAXMAN":

Contact your bank. You should have no problem retitling your property under your LLC's name and reissueing the loan under the LLC as well with a guarantee signed by you and your partner to the bank.

Probably get away with about $750 in fees with the Lawyer and bank fees.

The attorney will do a retitling so that will save you money instead of a full closing.

Joe

Joe,

I doubt very much that the lender will be OK issuing a new loan or otherwise taking the borrowers off the present loan. The lender might be fine for the property to be put in the LLC while the loan remains in the two individual names.

Any lender that would agree to what you are suggesting is a lender that would be fine issuing a loan to an LLC in the first place. A few exist but not enough to make it interesting for most investors.

John Corey

1 Reply

See this reply in the discussion

16 Replies

Jump to latestLatest

Sort by

Tom Wood
Residential Real Estate Broker · St. Louis, MO · Member since 2008 · 254 posts · 5 votes
19y
Typically you just do a quit claim deed over to your LLC. The bank has the right to call your loan due, but it is unlikely they will.

DISCLAIMER: I'm not a lawyer, this is just my opinion :D
0 Reply
Joe Wilson
Accountant · Newtown, CT · Member since 2008 · 123 posts · 34 votes
19y
Contact your bank. You should have no problem retitling your property under your LLC's name and reissueing the loan under the LLC as well with a guarantee signed by you and your partner to the bank.

Probably get away with about $750 in fees with the Lawyer and bank fees.

The attorney will do a retitling so that will save you money instead of a full closing.

Joe
0 Reply
Account Closed
Real Estate Investor · London · Member since 2008 · 3k+ posts · 74 votes
19y
Originally posted by "RECPATAXMAN":
Contact your bank. You should have no problem retitling your property under your LLC's name and reissueing the loan under the LLC as well with a guarantee signed by you and your partner to the bank.
Probably get away with about $750 in fees with the Lawyer and bank fees.

The attorney will do a retitling so that will save you money instead of a full closing.

Joe

Joe,

I doubt very much that the lender will be OK issuing a new loan or otherwise taking the borrowers off the present loan. The lender might be fine for the property to be put in the LLC while the loan remains in the two individual names.

Any lender that would agree to what you are suggesting is a lender that would be fine issuing a loan to an LLC in the first place. A few exist but not enough to make it interesting for most investors.

John Corey
1 Reply
Joe Wilson
Accountant · Newtown, CT · Member since 2008 · 123 posts · 34 votes
19y
Originally posted by "REI":
Originally posted by "RECPATAXMAN":
Contact your bank. You should have no problem retitling your property under your LLC's name and reissueing the loan under the LLC as well with a guarantee signed by you and your partner to the bank.
Probably get away with about $750 in fees with the Lawyer and bank fees.

The attorney will do a retitling so that will save you money instead of a full closing.

Joe

Joe,

I doubt very much that the lender will be OK issuing a new loan or otherwise taking the borrowers off the present loan. The lender might be fine for the property to be put in the LLC while the loan remains in the two individual names.

Any lender that would agree to what you are suggesting is a lender that would be fine issuing a loan to an LLC in the first place. A few exist but not enough to make it interesting for most investors.

John Corey

I guess I was lucky then, because both Suntrust and BB&T did it. I had to renew my loan at Suntrust and asked if I can put the loan in the LLC's name and she said sure, we'll just get a guarantee. I contacted BB&T and she said yes we can issue a new loan under the LLCs name and it will be $258.00 in bank fees.

As I mentioned before, the bank will want a guarantee signed by the LLC members.

Joe
0 Reply
Lee V
Stockton · Member since 2009 · 73 posts · 3 votes
17y
I know this is an old post, but just wanted to get an update to the above reference.

Do anyone know of any bank in today credit crunch that will allow a loan to be transfer from an individual into an LLC with the individual just guaranteeing the loan?

0 Reply
Jim Wineinger
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
17y
The other question that I did not see addressed in the posts is that most mortgages and trust deeds have clauses requiring title insurance and most title insurance companies will not insure a title recieved by a quit claim deed they want to see a warranty deed.

So you need to be sure the bank is ok and the insurance company is also ok or you may run into problems in the future even if the loan is not called due as claims which may arise are not paid due to the wrong entity being insured.
0 Reply
Thurman SchweitzerBusiness Member
Realtor · Fort Worth, TX · Member since 2014 · 29 posts · 5 votes
9y
Ok need help here... I am buying a property all cash (well HELOC but it's cash to the seller) I was going to put the property in one LLC now want to put in in another. Is this simply have the title company put it in the other LLC prior to close or do I need to have the contract resubmitted in the other LLC name?
[email protected]817-475-4060
1 Reply
Matthew McNeil
Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
9y
Thurman, initial question: will your bank allow you to deed the property to your LLC? Have you reviewed the terms of your loan? Most lenders won't allow this as far as I know.
0 Reply
Rhonda Rowland
Atlanta, GA · Member since 2017 · 11 posts · 10 votes
9y
Hi, in Georgia this would just require an amendment that can be executed at closing, if necessary. It would probably be easier on the closing attorney/title company to give them some time to prep closing docs accurately though. Since no lender needs to approve, that shouldn't be an issue.
0 Reply
Rick Ferguson
Real Estate Professional · Atlanta, GA · Member since 2016 · 54 posts · 17 votes
9y
A quick phone call or email to Carter Stout who exclusively practices Commercial Real Estate can give you the LLC ins and outs. He deals with banks, partnerships etc. everyday.
Carter Stout
Stout Kaiser Matteson Peak & Hendrick
4675 N Shallowford Rd Suite 200, Dunwoody, GA 30338
0 Reply
Susanna B.
Real Estate Agent · Blythe, GA · Member since 2016 · 46 posts · 13 votes
9y
I am with @Rhonda Rowland on this one. Give the attorney plenty of time to get your paperwork in order but an amendment should work I believe. It could depend on the state that you are in though. Granted @Rick Ferguson has a great suggestion so as I am not an attorney just speaking from past experience with document changes.
0 Reply
Matthew McNeil
Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
9y
An update to my previous post regarding Thurman's question after talking to my laywer. He said;
As with a trust, lenders do not exercise the "due on transfer/sale" clause when real property is transferred to the same individuals in an official capacity. Typically, the same applies to LLCs where you and your wife are sole members.
0 Reply
Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
9y
And to answer an earlier question, if the LLC members were identical to the individual owners, there would be no need for a new title insurance policy. The LLC would meet the definition of the term "insured" under the standard ALTA owners policy.
Gimer Law518 Reviews
Website View Page
0 Reply
Ronald RohdePro Member
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
9y
Originally posted by @Thurman Schweitzer:

Ok need help here... I am buying a property all cash (well HELOC but it's cash to the seller) I was going to put the property in one LLC now want to put in in another. Is this simply have the title company put it in the other LLC prior to close or do I need to have the contract resubmitted in the other LLC name?
You can assign the purchase contract prior to closing. Contact me if you have questions.
0 Reply
Casey Rumfelt
Huntsville, AL · Member since 2017 · 9 posts · 2 votes
8y
Quick question... I have an rental house that is out of state (Alabama) and I have been thinking about putting it in an LLC for a while. Will I lose my ability for a homestead exemption if it were in an LLC and I were to move back into the house? Additionally, would I lose my ability to avoid capital gains tax because I lived in the property 2 out of the 5 years because it's a business entity. ?
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.