Moving Property into an LLC
Hi BP Family,
I just setup my LLC and want to move my rental from my personal name into the LLC.
The problem is two fold: 1) I have a 3% loan on it that I don't want to let go of 2) I have a heloc on this property.
How do I just get it moved under the LLC without having to do a refinance?
Thanks so much for your collective wisdom,
Julie
I believe you can just do a quit claim deed to your LLC! Then the LLC is the owner but you still have your loans and such in your personal so it isn't too messy!
Contact your mortgage servicer; there is a request for change of title that you will complete to be authorized to change the title while retaining the financing in your name. Do not quit claim before getting authorization as it could effect not only your mortgage financing but your insurance (remember that you insured a property in your personal name...not an LLC).
It's important that you cover all the bases. Do it right once and be done with it.
Hope this helps...
#1 All Forums Contributor
- Investor
- Virginia
@Julie Asmussen
Why are you wanting to cost yourself more money? Moving to a LLC only costs you more money and does nothing else for you
If you think it will do asset protection you are getting bad info because your LLC is not separate from you, why is that, because the LLC did not even buy the property you moved it over and still have a loan in your name
Quote from @Chris Seveney:What about setting a trust that will hold the property and the LLC will hold the trust ?
@Julie Asmussen
Why are you wanting to cost yourself more money? Moving to a LLC only costs you more money and does nothing else for you
If you think it will do asset protection you are getting bad info because your LLC is not separate from you, why is that, because the LLC did not even buy the property you moved it over and still have a loan in your name
#1 All Forums Contributor
- Investor
- Virginia
@Dror Brumer
Sure waste even more money to create a complex web of nothing. Sorry for the sarcasm but there is so much bad advice and lack of research done by people
Unless you are in the illegal drug trade or handcuff your tenants in a room like in the movies, can you name 1 item that would cause you to be personally responsible for getting sued and need a LLC that would not be covered by insurance ?
Think about it another way
If you did get sued,
Other attorney:
1. Did you transfer this to a LLC? You - yes
2. Did the LLC buy the property - No
3. Do you pay the mortgage - yes
So the LLC is not acting on its own, it does not truly own it because it didn't buy the property you moved it to skirt the laws.
How do you think a judge would view this?
@Patricia Steiner that helps a ton! My primary mortgage is w chase and thru said move to llc no problem. However I’m reaching out to my lender who holds heloc on the property said no because at that point the llc is a business owned and heloc is for personal finance not commercial loan. So it appears for now I’m stuck. :(. But thank you sooo much for your advice!
I'm going to add my 2 cents on the LLC issue. When I got to a number of houses where my DTI was a challenge, and the amounts of reserves for properties equaled down payments for new properties, I moved over to DSCR mortgages. These lenders require closing in an entity. While doing that, we worked on the asset protection side of things. As we grew, forming the LLC and closing in it to start was the way to go.
Everything is more expensive. The rates are higher on mortgages originated for LLC ownership, appraisals are more expensive, insurance must be commercial policies. OK, electricity isn't higher...but many things are. Is it "worth it" to use an LLC. Absolutely, at some point. Ought it be done from the start? No. I don't think so. I grew organically, and took the next most reasonable step.