LLC As “Property Manager”
My husband and I just purchased our first investment property, a little run down 4-plex that we will manage ourselves. We were hoping to use this strategy we came across from Scott Smith here on bigger pockets:
https://www.biggerpockets.com/renewsblog/llc-lending-problem/
Buy in our name, transfer to land trust, deed to LLC. However, while in the process of closing, our attorney told us this really doesn’t get around anything. It would be the same as just transferring to the LLC and the bank could still call that a sale and the mortgage would be due.
Ok, so perhaps we keep the property in our name, but we don’t exactly want the tenants to know we are the owners. Our attorney suggested we could form the LLC as “property manager.” Would this make sense? We would approach the tenants saying, “we are ‘property management services, LLC.’” Keep all the money going in and out in an account under the LLC to keep it separate from our personal accounts. Obviously, if someone wanted to know who owned the property it’s real easy to look up online, but at least there would be a buffer between tenants and us as “owners”.
My next thought following would be, transferring money from an account held under the LLC to the mortgage held personally, is that like transferring money between two individuals? Would I be taxed after transferring over $14,000 to myself from LLC?
Maybe I am WAY over thinking everything, but we are just starting out and I’m a bit confused. Any advice or insights would be appreciated. Thanks!
-Sara B.