I have an LLC. Now what?

Question

Jon Pitcher · Answer

@Ganesh Rao

If you own the properties free and clear, then transfer them into your LLC with quit-claim deeds.  If any property has a conventional mortgage on it, the due on sale clause is an issue (as @Thomas S. mentioned above).  So you should leave it where it is or consult and attorney to see what your options are.

For future properties, if you're paying cash, buy them through your LLC.  If you are financing, you need to weigh the potential benefit of conventional financing (lower rate and longer fixed term) versus the flexibility of a portfolio loan, which can be done in the name of your LLC.

Thomas S. · Answer

You will need to contact your bank in regards to finding out if there is a due on sale clause. If so you will need to get a commercial mortgage on the properties.

You will have higher operating costs as a result but will not likely get any additional protection than you already have.

Depending on who it is you are hiding from there may be easier and less expensive ways to go.

Costin I. · Answer

@Ganesh Rao An LLC is not going to shield your identities - you need to pair that with a land trust to get the layer of anonimity. And even that is not perfect, but for sure makes it difficult for a casual search. Plus, with already purchased properties in your name you already have/leave a paper trail.

Yes, you can transfer them to the LLC (but better into a land trust, with the LLC as the beneficiary). You need to worry about DOS - so read the reply I posted on this subject on this thread 644738-due-on-sale-clause-did-it-happen-to-anybody. Beware of QCD transfers also.

Also, you might want to assess distribution of properties per LLC, as you'll not solve much if you put all your eggs in one basket. Especially if you'll also self manage the properties - if you are the one doing property management, you might want to separate the passive asset holding entities from the operations and public facing active entity.

Here is a diagram to help you on this quest - but first evaluate if you need all these complications - you should have some serious equity and/or cash flow before going this route:

Not a lawyer, nor CPA, due diligence still required.

John Thedford · Answer

An LLC does not Shield identities. It can provide some asset protection though.

Michael Plaks · Answer

Just a regular bank-to-bank transfer. All major banks allow this option. If in the same bank - even easier.

Andrew Musholt · Answer

I am currently going through the same process. I filed the LLC after purchasing the property, which is inconvenient, but my bank is only charging me $150 to switch the title to the LLC. That being said, I still have to personally guarantee the loan. My bank said there would be no due-on-sale clause.

As for insurance, one agency said I could still use my regular home policy (just need to change the name to my LLC), the other said I would need to get a commercial loan (which is twice as much).

I used an attorney to write the LLC, and he has a good relationship to my banker. Because this is my first LLC, I will gladly play it safe and pay for the expertise!

Chuck Dangar · Answer

I also have the LLC set up and now I'm about to open a business account.  Not sure if this is related but how do I move money that I've saved up in a personal account  into the new business account/LLC without it being connected to my personal account?

I have an LLC. Now what?

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