Posted by Anna on July 29, 2003 at 20:18:35:
If you have any doubts about legitimacy of such transaction you should check with an attorney.
I have never heard of anyone getting in legal trouble for transferring deed from a person to an entity. I believe this is perfectly OK.
Set up a LLC first before purchasing the property? - Posted by Sam
Posted by Sam on July 20, 2003 at 19:26:03:
Hi, I have a question about LLC and investment property.
I am going to purchase my first investment property (a triplex). Do I have to set up a LLC first before I buy the property and let LLC takes the title, or can I set up the LLC later after the purchase and then transfer the property into the LLC? Any advices are appreciated.
Sam
Re: Set up a LLC first before purchasing ? - Posted by Anna
Posted by Anna on July 21, 2003 at 22:49:17:
You want to set it up after. Lenders will not lend money to an entity, only to a “person”. LLC is not a “person” meaning if you default on the mortgage they would not be able to go after anyone.
Buy a property and set up the LLC right after the purchase.
Good Luck to you!
Thanks - Posted by Sam
Posted by Sam on July 22, 2003 at 13:26:53:
Thank you very much, Anna.
Did you also mean to set up one LLC for one property?
Sam (MN)
Re: Thanks - Posted by Anna
Posted by Anna on July 22, 2003 at 22:27:33:
Sam,
Each investor has it’s own idea on what the optimal solution is - some do LLCs, some buy umbrella insurance, some just take the risk… Therefore you may hear different opinions.
Many investors, including myself, favor putting each property into a separate LLC. In case you get sued by a tenant in property A, only property A will be in jeopardy. If tenant in property A sues you and you have property A, B and C in this same LLC, you may loose all of them.
But with this also comes pain to set up separate LLCs each time you buy a property (time, expense).
As I stated, this is just my opinion as I am a risk - avert investor. I don’t want to end up in a poor house because a bozo trips over his own foot and breaks a leg on my property.
I think that it’s worth the time and money though.
You can always put couple of properties into one lLC to make it easier
Re: Thanks - Posted by Casper
Posted by Casper on July 26, 2003 at 02:25:06:
Hello Anna,
After you buy the property in your name, and then eventually transfer it to your LLC, will that transfer not cause problems with your mortgage holder ? After all you have just transfered away their collateral to another entity, that is separate and apart from you the borrower.
How exactly can this be done without being breach of the mortgage.
Please let me know. Thanks.
Cas