Experience with LLC for rental properties

[A Khan]

I did a lot of research about setting up LLC before buying my first rental property. I congratulated myself on doing the whole process of writing articles of organization, coming up with a catchy name, setting up business account for LLC and most of all forming LLC ready to receive rental properties under its properties as a mother hen ready for her chicks. Well, my mortgage lender was not a fan of loaning to an LLC. No problem, we can set up the transfer of property into the LLC after initially buying under my own name. Or so I thought. Now, a few weeks after the closing, when I called my assigned loan servicer, they plainly and flatly said they did not allow it. It is not about due on sale clause only - they said it was simply not allowed, inconceivable, almost make it sound like it was physically impossible thing to do. Mother hen is sad, not having any of its chicks under its wings!

[Andrew Glisson]

Not tax or legal advice but I’d just separately bookkeep the property P&L and buy a higher limit of insurance.