hi, I own a house that I would like to rent out but under LLC. The house used to be my personal residence and financed personally not by LLC. What is the the process to transfer the property to LLC for liability protection when I rent it? The process of refinancing the home with LLC and losing my low interest rate I got 6 years ago sounds like losing a lot of money plus all legal fees. Any other ways how I can rent the house via LLC?
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
6mo
It's fairly easy but there are some lenders/banks that have a "Due on sale" clause if you purchased as primary home under Fannie Mae, FHA, Freddie Mac etc.. The easy way is to fill out a "Quit Claim form" and change the "Vesting" which is simply personal name to LLC.
If your lender or bank has a Due on sale clause just do either a DSCR, or Portfolio (rate and term) refinance and set up closing for vested in LLC. If your loan to value LTV is lower than 75% you can beat a 6% rate if your credit is good. Low LTV refinances right now with good credit are in the 5.50% to 5.875% range if 4 units or less.
You coudl also take out some cash if needed and keep your rate pretty much the same and use the cash for a down payment on another property. If you have any questions feel free to check out my profile and send me an email. Always happy to help other BP members save time and money!
It is likely your lender will never become aware that you transferred your property with a Quit Claim Deed to your own LLC, so I wouldn't worry about that. As long as they get their payment every month, you won't be on their radar no matter what checking account your payment comes from (you will need to make the payment from your LLC checking account from then on). The biggest issue to check out is whether your local property taxing body will require you to pay real estate transfer taxes, so you will have to check with your Recorder of Deeds office at your courthouse for the rules.