LLC,transfering title, due on sale clause,+ making it all legit

29 Replies

When you finalize the transfer you need to update your insurance policy to reflect the new ownership of the LLC. Talk to your insurance agent on how to do this. Some companies will add it as an additional interest and some put the LLC as a named insured. Either way it has to be done even at the risk of your lender finding out. As just one broad example, if you gloss over this update and a lawsuit related to the property occurs your LLC would be in trouble. It owns the property but the insurance policy will provide no liability protection to it becuase it's not listed.

I just discovered a way to partially address this issue that no one has ever mentioned to me.  So shout out to my cpa for suggesting it.  

Put your address as a P.O. box.  Then you have no due on sale issues and you don’t get junk mail.  Sure it won’t be a whole separate entity but that’s what good insurance is for 

Originally posted by @Caleb Heimsoth :

I just discovered a way to partially address this issue that no one has ever mentioned to me.  So shout out to my cpa for suggesting it.  

Put your address as a P.O. box.  Then you have no due on sale issues and you don’t get junk mail.  Sure it won’t be a whole separate entity but that’s what good insurance is for 

This might work for some but unfortunately not my scenario. I need the LLC to be on the title so it can collect rent, pay utilities, deduct mortgage interest paid and be able to depreciate the home on its tax return so that all profits and losses can be evenly split between the two owners of the LLC (myself and my father).

@Mike S.   Interesting strategy and seems to be what the Andersen Advisors suggest -- the WY holding company, with a C-Corp management entity, that enters into long-term leases with the LLCs.  is that who you used?

@Noah M. I had them involved at one time in a part of my structure. But I am pretty much in line with the majority of their standard setup. I have also an offshore entity for some international investments but Anderson is not involved in any offshore structure. The management company is just contracted by eqch properties llc to act as the property manager for them. The whole setup is probably a little bit heavy for my current situation but offers the flexibility I was looking for my futur projects. And i don’t mind the minutia of the corporate and companies paperwork, probably part of my OCD side :-)

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