Rental Property Investor · Dayton, OH · Member since 2019 · 21 posts · 11 votes
All my previous deals have been purchased and financed through my LLC. But I have four triplexes in contract right now that I am wanting to finance in a conforming 30 year mortgage to get the best possible rates and improve the cash on cash return. My contact at my credit union suggested I have them deeded in my personal name then quitclaim the deeds to my LLC.
Please please do not ever use a quit claim for anything except in divorce where one party relinquishes claim (quit claim).
Always use a warrantee deed in both directions AND best to do this at the same attorney that closed this in the first place who issued the title insurance. You do not want to break chain of control and stop your title policy. Its a shade of gray for some title insurers and for others its clear, you loose title insurance using quit claim. Work with your originally closing attorney have him handle the re-deeding and working with the title co to be safe.
Way too much bad advice re quit claim use. Its just a piece of paper. You currently have good title, so pass good title via a warrentee (or as the attorney may correct via a limited warrantee) deed.
Please research how you must work within, treat your LLC in order to protect your corporate veil. Too many folks think moving title into an LLC is bullet proof. It is not. Actually hardly worth it the way LLC members don't do the many things each year. A separate bank account that you only use to pay contractors and accept rent... Books on that account.
Best tactic is; Have good liability insurance and an umbrella, keep the houses repaired well, be quick to fix things, be a good landlord.
Great points Curt! I felt like this was getting out of my league and you just confirmed that for me. I will dig in with the attorney handling the title work. Thanks for responding!
The risk of buying the property in your name and then transferring to the LLC is that the lender may trigger the "due on sale" clause. However, if your credit union is the lender and they say that's fine, then it's fine so long as they don't sell your note before you do that. Get them to confirm in writing that you can do it. And keep separate bank accounts and books regardless of whether it's an LLC, your name, or anything else.