LLC Ownership Transfer

[Tom Murphy]

Hey guys,

Just looking for some knowledge from someone with experience in this arena. I have an llc in which I have been purchasing properties through already, however the banks usually charge 20-25% down payment when the loan is under an llc.

Has anyone had any experience with purchasing a property under their own personal name to receive the advantageous terms of a personal loan (5% down and lower interest rate and 30 year amortization) and then transferring ownership to the llc?

If so, what are the ramifications of this?

What is the process and who do I contact to transfer owernship?

Is it easier for someone to come after me and my personal assets or will it continue to keep my personal and llc affairs separate?

Thank you,

Tom

[Kevin Romines]

Fannie Mae changed there rules about 2 years ago, and they now allow the borrowers to transfer the property to an LLC that the borrowers are the majority members of, without it triggering the due on sale clause. This is huge and a great benefit to real estate investors.

Besides, any attorney worth their salt can pierce the veil of an LLC to then get to your personal assets. Most the portfolio type loans and some commercial loans still require a personal guarantee. Right there it could be considered co-mingling and the veil can be pierced.

The better route to take is no matter if you hold them personally or in an LLC, just make sure you have the highest liability coverage available on your insurance policy and I would follow that up with a larger than needed umbrella policy (they are fairly inexpensive).

See Fannie Mae's guideline change below: