Hi everyone, just wanted to reach out regarding a question I have about asset protection. My wife and I just opened up a series LLC here in Texas for the purpose of renting out the first home we bought and lived in and recently moved out of. We have a tenant living there now and the rental agreement with the tenant was through our LLC and the property management company who is dealing with the tenant was hired through our LLC. So all of the operations are being done through the LLC, but the asset is not technically owned by the LLC because we still have a mortgage with less than $30K left to pay off the house. I called the mortgage company to see if they would be okay with us transferring the deed over to the LLC, but they told me no and that it's against their policy. To get around this without having to pay off the remaining balance of the mortgage (Due on Sale Clause), our lawyer recommended writing up a side agreement between us and our LLC stating that the LLC has the right to use the property and the first right to buy the property once the mortgage has been paid off. This was written up to tie everything together.
So my question is, if we don't do that side agreement and left the property in our name while the LLC runs all of the rental operations, would the LLC still provide us with asset protection? Or would the fact that the property being in our name pierce the veil of the LLC and asset protection would be compromised? Does the property need to be in the name of the LLC in order for asset protection to work?
We do plan on buying more properties in the future which is why we opened up a series LLC.