How to transfer title to LLC?
Hi everyone.
I just closed on a single family home that I’m planning to flip.
I have financed it using a conventional mortgage under my name, and I would like to transfer the title to my LLC, so I can manage the renovation through it.
* Any lead on how to conveniently transfer the tittle to the LLC?
Thank you very much in advance, ciao.
Michele
Quit Claim Deed. You can probably have a lawyer or title company draft one for you for a few bucks.
I have read that your mortgage companies will not allow the transfer, any experience in issues doing this?
Yes, you can quit claim deed the property over.
Just be careful. make sure it doesn't invalidate your Title insurance. Update your insurance and mortgage's insurance clause. Be mindful of the Due on Sale Clause. In the very very rare situation it does get called, just be prepared to refinance. Also, consult a qualified professional or two after , or before, all this to find a way to maintain your corporate veil, the real point of having a LLC. Having this sort of "frankenstein" setup isn't conducive to protecting your corporate veil in my layman's opinion. I keep mentioning this, but nobody has rebutted. I write more about it in this thread: https://www.biggerpockets.com/...
Good luick.
Thank you very much David.
This seems to be quite a long and challenging process...
posted by @David M.:
Is there any "easier" way for me to keep the deed/title/mortgage the way they are and charge my LLC for all renovation costs?Yes, you can quit claim deed the property over.
Just be careful. make sure it doesn't invalidate your Title insurance. Update your insurance and mortgage's insurance clause. Be mindful of the Due on Sale Clause. In the very very rare situation it does get called, just be prepared to refinance. Also, consult a qualified professional or two after , or before, all this to find a way to maintain your corporate veil, the real point of having a LLC. Having this sort of "frankenstein" setup isn't conducive to protecting your corporate veil in my layman's opinion. I keep mentioning this, but nobody has rebutted. I write more about it in this thread: https://www.biggerpockets.com/...
Good luick.
Just asked a lender this question today. She explained to me that if the transfer is done after the closing then essentially you have to refinance through the LLC. But she also said that it is specific to each state, so I would suggest contacting a lawyer. In our case, because I haven't made the purchase yet, I have the option to finance through a personal mortgage but the title to the house would be to the LLC- basically I would be lending to the LLC.
right... The "correct" way would be to transfer title and refi the mortgage into a commercial loan under the LLC's name so everything is clean...
If you just want to use the LLC for reno.. then just treat it like a renovation / contractor company and bill accordingly. If you are doing it for yourself, I THINK NJ's Home Improvement Contractor (HIC) registration won't apply --- or they won't catch up to you anyway since so many people do, more or less.
Is that all you wanted? You don't even need the LLC to claim the reno costs, neither for Federal or NJ tax purposes.
@David M.
Thank you very much, truly appreciate your guidance. I am looking into this option.
@Stephen Reyes
I’ve done it a few times. So far, as long as the lender gets the money regularly (think about setting up auto-draft), they don’t bother. I heard during the Great Recession that some cracked down on this practice, but I discussed what I was doing with my lenders so they were fully aware.