Trying to rent house so I can buy 2nd

Member since 2023 · 7 posts · 8 votes

I own a house. There is a mortgage on it. I don't want to refinance 2.6%. Can't put in LLC. "Due on Sale". I want to rent it out and go buy my 2nd house that will be my primary for a year. How do I protect my 1st house from lawsuits or whatever if I can't do an LLC?

This is the only way I can achieve my dream of buying a property every year till I have 6. Six is my goal.

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Ray Hage

Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes

Quote from @Kim Swidarski:

This is the only way I can achieve my dream of buying a property every year till I have 6. Six is my goal.

I got an umbrella policy for liability only for about $1700 annually and it has $1m in coverage. I think that is good enough if you can't move it into a LLC. And you can have multiple properties under that same coverage. I did it with 6 properties.

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Jules Aton
MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
1y
Personally I prefer to use an umbrella policy when there is only one or two properties. Also remain flexible with your goals and associated time lines. Rigidity and urgency can result in bad outcomes.
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Kim Swidarski
OP
Member since 2023 · 7 posts · 8 votes
1y
Thank you. I will look into that. And appreciate advice. I'm totally flexible to all the nuances of this venture. So I'm not being rigid. Just a goal. I just turned 60. Don't have a whole lot of time to do the diy work myself before my body wears. LOL I do have remodeling experience so it's just knowing that I probably only have about 10 years left to do physical work. I am actually being overly cautious. Hence wanting to protect my home/asset. Thank you.
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David PeschioBusiness Member
Richmond, VA · Member since 2019 · 358 posts · 181 votes
1y
If you are not refinancing why cant you place the property in an LLC?
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Kim Swidarski
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Member since 2023 · 7 posts · 8 votes
1y
Rocket mortgage said I couldn't switch my current mortgage to LLC. I would have to pay loan off.
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David PeschioBusiness Member
Richmond, VA · Member since 2019 · 358 posts · 181 votes
1y
Have you checked your paperwork to see that you definitely have a "due on sale" clause if placed in an LLC?
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Ray Hage
Investor · Fort Lauderdale, FL · Member since 2020 · 1k+ posts · 755 votes
1y
Quote from @Kim Swidarski:

I own a house. There is a mortgage on it. I don't want to refinance 2.6%. Can't put in LLC. "Due on Sale". I want to rent it out and go buy my 2nd house that will be my primary for a year. How do I protect my 1st house from lawsuits or whatever if I can't do an LLC?
This is the only way I can achieve my dream of buying a property every year till I have 6. Six is my goal.

I got an umbrella policy for liability only for about $1700 annually and it has $1m in coverage. I think that is good enough if you can't move it into a LLC. And you can have multiple properties under that same coverage. I did it with 6 properties.
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Kim Swidarski
OP
Member since 2023 · 7 posts · 8 votes
1y
Thank you so much. :-)
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Raymond J. RodriguesBusiness Member
Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
1y
@Kim Swidarski you should find out if it is Fannie Mae or Freddie Mac that services your loan with Rocket. Fannie Mae has guidelines that state that a property can be transferred into an LLC, but there are some requirements to be met. At the end of the day, the servicer can supersede this allowance.
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