Most Prudent Course of Action to "transfer" properties into LLC?

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Most Prudent Course of Action to "transfer" properties into LLC?

Jorge Ubalde
Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes

Good Morning Fellow BP rockstars - My apologizes in advance for asking what I'm sure has been a very common question throughout our forums.

What's been your experience in transferring properties currently financed by bank into your business LLC? We have an established LLC and multiple properties in our names that we would like to move into our LLC. Please provide any suggestions/recommendations you may have.

Is there a prudent way to accomplish this? I'm told banks these days are actively pursuing "due on sale clauses" when investors transfer title from personal to LLC. So that is something to consider as well...any insight would be awesome!

I appreciate your feedback! See you around BPland! 

Jorge

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Eduardo Rodriguez
New Braunfels, TX · Member since 2018 · 19 posts · 10 votes
8y

I am in your same situation, already talked to the lawyer, this is done routinely, you can ask for permission (they will say no), some credit unions don't care the best option is to do it, they will advise you on the due on sale clause and you will have time to cure (at this point you can transfer back to you) the bank forgets about you, then you transfer back to LLC (u will not pay the note) worst case scenario after a few years you probably need to refi-cash out get a bank that doesn't care.

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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    8y

    @Jorge Ubalde - You can do a quitclaim deed to your LLC. The bank can call the note due. That's it really, no way to get around that if it is a residential loan

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  • Jorge Ubalde
    OP
    Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes
    8y

    Thank you Brie for taking time to respond to my post!

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  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    @Jorge Ubalde If you know this has been posted about 100 million times why would you post it again lol? There is no 100 percent way around the due on sale clause. You can spend a fortune on lawyers and trusts and llcs if you want but it still won’t guarantee it doesn’t happen. Is it likely the bank calls the note? No. But it does happen and as interest rates rise they will have more incentive to do this.
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  • Eduardo Rodriguez
    New Braunfels, TX · Member since 2018 · 19 posts · 10 votes
    8y

    I am in your same situation, already talked to the lawyer, this is done routinely, you can ask for permission (they will say no), some credit unions don't care the best option is to do it, they will advise you on the due on sale clause and you will have time to cure (at this point you can transfer back to you) the bank forgets about you, then you transfer back to LLC (u will not pay the note) worst case scenario after a few years you probably need to refi-cash out get a bank that doesn't care.

    1Reply
  • Jorge Ubalde
    OP
    Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes
    8y

    @Caleb Heimsoth - Did my upfront apology not mean anything? lol! Thanks for taking the time to respond to my thread Caleb!

    2Reply
  • James W.
    Minneapolis, MN · Member since 2017 · 353 posts · 223 votes
    8y

    @Jorge Ubalde  Why would you posted another thread on the topic instead of using the search bar for something you thought would be a "very common question?" 

    1Reply
  • Jorge Ubalde
    OP
    Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes
    8y

    @James W. noted. Thank you for your valuable input.

    3Reply
  • Jorge Ubalde
    OP
    Real Estate Investor · Glen Burnie, MD · Member since 2017 · 58 posts · 21 votes
    8y

    @Eduardo Rodriguez Thanks for taking the time to answer my post! I appreciate it.

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