LLC question - month to month tenants and cash tenants

[Joe Lee]

We just recently created an LLC for a rental property that has some month to month tenants. Will this be a problem? Do I need to create a formal lease where the LLC is named as the building owner, or is it okay to keep it month to month and just make sure that the tenant write checks payable to the LLC?

Side question: If a tenant pays rent in cash, I would simply deposit this cash into the LLC bank account. On paper, it would be hard to differentiate whether this is a capital contribution or a rent payment. Does it matter? Do I need to do something so that the source of cash deposits is easily distinguishable?

[Jaclyn McClellan]

Also be careful transferring ownership from your name to another entity you could trigger a due on sale clause with your lender!