Transfering Personal Residence to an LLC

[Brandon Clements]

Hi, my name is Brandon and I currently live and work in Grand Rapids, MI.

To help explain my question I'll provide some background:

I purchased my first property in early 2018 (single-family, 4 BR) with the intent of living in one room while renting the other three. This has been going well (since August) as I live with friends I graduated college with. The arrangement works great because I generate monthly cash flow and my friends/roommates pay less rent compared to our previous apartment.

Over the next couple of years I plan to grow a portfolio that includes multiple properties (single-family/duplexes), which will be occupied by various tenants (aka not close friends). I've been told it makes sense to own income producing properties in the form of an LLC for liability reasons.

My question is: Do I need to own rental properties through an LLC? and if yes, how can I transfer my current property (mortgage is to me personally) to my LLC?

[Russell Brazil]

Do you have a loan on the property or is it paid off? If you have a loan, will need to get a commercial loan then and pay off the residential loan. You will also need a commercial insurance policy. You will need to setup the LLC, and get new bank accounts for the newly formed company. Very important to make sure you do not comingle company funds with personal funds or the LLC becomes pierceable.