I'm planning on transferring title of a small multi-family into a LLC, from my personal name. The purpose is strictly for asset protection. I've owned for 6 years and never missed a mortgage payment (conventional mortgage). My assumption is that the due on sale clause will not be enforced because of my strong payment history. Again, never a hiccup.
Has anyone had real world experience (not theory, please) when a lender actually enforced the due on sale clause because of a title transfer to LLC?
Also, do I need to inform my insurance carrier beforehand? How does that process usually work?
I will also need to set up the proper bank checking/savings account as well. Any advice here?
The goal again is strictly for asset protection. I want to do things the right way.
I do not have first hand experience with the due on sale clause so can't comment there. However, make sure to speak to a title agent also since transferring into an LLC will usually void your current title insurance policy.
Thank you @Chris Kennedy
Also interested in real world situations. Thanks for starting this, @Michael Germinario
No problem @Lucas Miller . Hopefully we'll get some valuable tips on this thread!
@Michael Germinario Any updates on this? did you end up transferring your property to an llc?
If the requirements of real world experience and not theory was required on all discussions bigger pockets would be less active for sure.
@Michael Germinario ...just saw this thread. I'm looking to something very similar to what you're doing or have done in about 3-4months. Any learnings or suggestions? I want to transfer an existing property under my name (with mortgage) over to my LLC. Anything to look out for? Thanks.
@Eric Dea @Donnie N. In short, I never ended up transferring title. Instead I went in the complete opposite direction and decided to sell my property. Real estate investing doesn't suit my lifestyle at this point.
If you do decide to transfer title make sure you speak with a real estate attorney first who can guide you through the pros and cons. It is important to understand that your lender has the right to call the note payable in full if you transfer title. My understanding is that this rarely happens, but still a risk you need to consider.
Thanks @Michael Germinario
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