my wife and I currently own two SFH rentals that we placed in an LLC. We are now preparing to move and would like to add our current residence to our rental business.
My question is: how can we operate our present home out of the LLC even though we hold the mortgage under our personal name and not that of the LLC?
Thanks for any tips you can offer.
Be very careful here
I have been down this road, and what has ended up happening here is because you have already owned it, the mortgage will still remain in your personal name. There really is nothing helping you here, other than now connecting both your personal name, and LLC, to that property by transferring it.
Talk to your local investor-friendly, real estate attorney. Ask about the mechanics of a quit-claim deed to transfer the property to your LLC. Also have him/her explain the risks of 1) the due on sale clause in your mortgage and 2) the liability associated if you leave the property in your name. This conversation will take 5-10 minutes and you will have a clear answer at the end.
A clear answer is a good insurance policy.
Thanks for the feed back!
I was wondering if we could leave the property in our name and "hire" our LLC to manage the rental and then pay the LLC most of the cash flow as compensation?
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing