First off I’m not a lawyer, but I have some knowledge of an LLC. Essentially the LLC is it’s own entity. However, there are rules about the LLC. For example you’ll need to keep everything separated. New checking accounts, new lease contracts, new everything. In the event you get sued, you’ll want to make the court know that the LLC is it’s own entity, this only happens if you separated everything from your personal assets. Now. It’s my opinion that free and clear property means you could lose it. If you’re comfortable I’d use the equity to further my investments. Also I would get a good property lawyer. Also you need to talk to a lawyer who specializes in LLCs and small business set up. I hope all this helps. LLC laws are different for each state so make sure you do the research.
Wether in your name or an LLC insurance is a good first defense. If you have a "ghost"mortgage on the property and want to refinance you will need to satisfy the ghost mortgage before or at closing most likely. You could possibly get a second or subordinate the first to the new lender dependent on LTV and how much $$ you wanted. Consider getting a line of credit to begin with.
Dead equity creates a major loss in income on investment properties. Any property with excessive equity is a liability. Your only option is to leverage property to the max and reinvest in other income vehicles. real estate, REITs, income fund etc.
No point in investing if you have dead equity not earning it's keep turning real estate into a liability.
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