Set up a LLC first before purchasing the property? - Posted by Sam

Posted by Sam on July 21, 2003 at 12:04:57:

Thanks a lot, Alex. I am feeling better.

Sam (MN)

Set up a LLC first before purchasing the property? - Posted by Sam

Posted by Sam on July 20, 2003 at 19:31:17:

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: purchase the property first! - Posted by Alex F. (CA)

Posted by Alex F. (CA) on July 20, 2003 at 22:44:40:

Go ahead and purchase the properties, then roll them under the LLC. It will take approx. 1 month to get your LLC going. You should be fine. Each case is different, but I got my LLC established 1 year after I bought investment properties. Your triplex can’t wait so buy it first!

Good luck,

Alex F. (CA)

Re: purchase the property first! - Posted by Sam

Posted by Sam on July 21, 2003 at 10:15:08:

Thank you very much, Alex. One follow-up question: What happens if the bank doesn’t like me to roll the properties under LLC? Does it trigger the due-on-sale clause?

Sam (MN)

Re: It’s easy - Posted by Alex F. (CA)

Posted by Alex F. (CA) on July 21, 2003 at 11:52:42:

Just deed it over to the LLC. The lenders don’t have to know about it. All of my lenders don’t know about my transfers. If you’re uncomfortable with this then go ahead and tell the bank/lender that you will be transferring title for “estate planning” purposes and you need the title to be vested in the name of the LLC. Explain that to accomplish your estate plan gifting needs, to gift away your estate, you need your real estate to be owned by an LLC. Banks should understand this, in fact, they will appreciate that their clients are sophisticated enough to have estate planning goals.

I just personally don’t want to go through the hassel of calling my lenders. Remember Sam, this has been done thousands of times many years before from investors like us, so don’t worry.

Alex F. (CA)