All Forum Posts by: Mike S.

The operating agreement is the most important document of your LLC. That is what will break the asset protection or company veil, it is also what will create conflict or lawsuits between members. Depending on the purpose and goal of your LLC I would stay away from generic operating agreement templates and either get a specific template geared towards your specific goal and state or better use an attorney knowledgeable in that field.

@Mark S.

When I created my living trust I went to all my banks to have all my accounts retitled to the living trust.

The checks and debit cards still have my name on it but the official owner is the trust. Most banks have no problem retitling the account. It does not change anything on a daily use basis.

Only credit cards are still on my name and not the trust.

@Mark Lewis

I am not sure that you would be authorized to install it in your property. Check your zoning ordinance and call code enforcement to see if it would be approved without permit and/or variance in the property.

@Fred Tracy

By rereading your post I am not sure that I answered your question correctly.

My answer assumed that each property was in a different series of the same LLC (three different legal entities)

If all three properties are in the same series of the LLC you can use the money generated by one property to pay expenses from the others as they all are owned by the same entity.

@Fred Tracy

I do believe that you have to take a distribution from the cash positive series to then contribute back to the negative series.

However you can not directly transfer from one series to the other as they have no direct relationship. It should go through you. If not, one could make a good argument to pierce the veil.

Instead of making a check, you could consider having a cash account in your books where you just record a paper cash transfer as you would have done with the check. Another option that is cleaner is to have a personal bank account in the same bank and do online transfers instead of checks. These are immediate and you could do all three transactions in a matter of minute.

Anyway you look at it, you still need to have it properly recorded in your books.

@Jayson Pocius

In my case I established a C Corp as my management entity that is the manager of my properties and my holding company. That is where I am getting all the side benefits like welfare plan and where I can take a salary to get active income if I want to contribute to a QRP.

However all my single member LLCs are owned by a WY holding LLC to get the WY charging order protection and consolidate all tax reporting through one entity only. Each single member LLC is member managed by the WY holding LLC to keep the anonymity offered by WY.

@Charrand Jones

Look at the use of a land trust to avoid due on sale clause. Some lender will accept transfer to a single member LLC that you own 100% some won't.

The transfer by itself is made with a warranty (or special warranty) deed as a quit claim may cause title insurance problem.

In some state/counties this transfer may trigger transfer tax or reassessment of the property value for taxes. In some however you may avoid it by proving to your property appraisor’s office that there was no change in ultimate beneficiary,

Once transferred you will need also to update the name insured on your policies and update your lease and utilities contracts.

Tax wise for you, if your LLC is disregarded that would not change anything for you as you will continue on the same depreciation schedule as before and you will just record the tax basis value of the property as a contribution to your LLC.

Fidelity has free wire transfer I believe for most of their account.

@James Hughes

First of all do not use a quit claim deed as you may loose title insurance, use a warranty or special warranty deed instead.

Second, you could deed the property to a land trust where you are the beneficiary. The Garn st Germain act will protect you against a due on sale clause. Then you could assign the beneficial interest to the LLC. This assignment is not recorded.

@Thomas D Armistead

If you have enough in your IRA to fully finance the purchase (or the down payment) without needing adding some more of your own cash, then you could use a self directed IRA or roll it over to a self directed 401k and purchase the property directly from within without taking a distribution nor paying the penalty associated with it.