Due on Sale and the LLC.

[Rosalie Evans]

Is it risky at this time to ask your bank to allow you to put your investment property into a single member LLC? I opened an LLC just for this reason but I have not transferred it. I have heard that some investors just do it without asking. I have heard that sometimes these notes get called. If my note got called it goes without saying that the interest rates would torpedo any chance of cash flow. Does anyone have any advice on this topic. TIA!

[Michael Anderson]

Quote from @Rosalie Evans:

Is it risky at this time to ask your bank to allow you to put your investment property into a single member LLC? I opened an LLC just for this reason but I have not transferred it. I have heard that some investors just do it without asking. I have heard that sometimes these notes get called. If my note got called it goes without saying that the interest rates would torpedo any chance of cash flow. Does anyone have any advice on this topic. TIA!

I personally think it's pretty reckless advice when people say to switch your conventional loan to an LLC and violate the note terms. If you need the LLC protection that badly, get a commercial loan. But if you don't want to violate your loan terms… insurance policies are your friend. Get a nice big umbrella policy.