All Forum Posts by: Garrett Leahigh

@Garrett Leahigh it's a simple quit claim process. It's quick and there aren't any tax implications- at least in CT where I live. If you want to refi or do a heloc down the road- you'll most likely have to quit claim it back into your name as most lenders do not lend to LLC's unless it's commercial.

What @Julie N. wrote is correct. I've done it many times. Just make sure the LLC is set up with the names of the same people who bought the property. I've added a comment below that I've posted on similar questions from other BP members;

The lender can exercise the "due on sale" clause if the name(s) of the buyer are not the same name(s) as the members identified as the owners of the LLC. For clarity; as with a trust, lenders do not exercise the "due on transfer/sale" clause when real property is transferred to the SAME individuals in an official capacity (e.g. Joe and Jane Smith as trustees of Smith Trust). Typically, the same applies to LLCs where you and your spouse are sole members (single or multiple member LLC). Regardless, you should first talk to your lender and tell them exactly what you’re planning and get their approval.

Next is to check with the Title Company regarding the Title insurance. Generally, the coverage of the policy will state; “The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured after acquisition of the Title by an Insured or after conveyance by an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.” Again, as with the question regarding the lender mentioned above, its best to ask your Title company if the insurance coverage remains intact if the asset is transferred.

@Garrett Leahigh, why would it take a month to set up an LLC? You should be able to do it fairly quickly online. Are you forming it as a single member?

Also, how are you financing the deal? If you are paying with your own cash, then you shouldn't have to worry, but if you get bank financing or other secured lending you may trigger a due on sale clause when you make the LLC contribution.

In the great state (commonwealth) of Pennsylvania, we have found that any transfer to an LLC will trigger city/state transfer taxes. Please check your own state's interpretations of this. Also, make sure you notify your insurance company of the change and see what they have to say.

@Garrett Leahigh Keep in mind also, if you are planning to buy a property that needs rehab with a hard money loan most HMLs we deal with here in Connecticut will require you to own the property in a LLC. You can always quit claim at closing from your personal name to a LLC at closing if neccessary, had a client do that a couple weeks ago.

@Garrett Leahigh what type of financing are you using? If you are using conventional you will have to purchase in your name, if commercial, you will have to purchase in your LLC. In PA if you switch from your name to an LLC you will incur transfer tax of 2%.

Curious to hear your reasoning behind why it must be in the name of the LLC or why you're opening an LLC in the first place? From a tax perspective, an LLC will not do a whole lot for you. I assume you're doing this to protect yourself from liability on the assets? Why not just buy an umbrella policy to protect your assets? They're fairly inexpensive. $30 a month maybe? There's a great post about it found here:

https://www.biggerpockets.com/renewsblog/2013/08/1...