Transferring properties to LLC. - Posted by Steve Heller

Posted by phil fernandez on December 18, 1999 at 19:32:29:

I don’t know what it costs to set up a Corp, but the cost for each of my LLC’s was as follows :

State fee to set up LLC $75 ( articles of organization )
Attorney’s fee $100
recording new deed $11

Total cost for each LLC $186

Plus there is a $15/year fee to the state.

Now that I have the Articles of Organization, which is a one or two page document, I could fill in the blanks and set up my own LLC without paying the lawyer the $100.

Transferring properties to LLC. - Posted by Steve Heller

Posted by Steve Heller on December 17, 1999 at 07:26:17:

Does anyone have experience transferring properties to their LLC. I just recently set up one based on the advice of Bill Bronchick. Was wondering if anyone could shead some light on getting the properties actually into the LLC.
Thanks!

Re: Transferring properties to LLC. - Posted by phil fernandez

Posted by phil fernandez on December 17, 1999 at 09:47:03:

Steve,

I recently set up some LLC’s. We first created the LLC, then I deeded the property from my name into the LLC. The transfer into the LLC is the same as any real estate transaction from grantor to grantee. Nothing complicated about it.

Now if your question is how do I transfer the property from my name into a LLC when there is a bank mortgage on the property, you have to be aware of the Due On Sale Clause. Deed the property into a trust with the LLC being the benificiery.

Re: Transferring properties to LLC. - Posted by Phillip

Posted by Phillip on December 18, 1999 at 10:08:57:

Is it necessary to create a new LLC for each property or is it possible to place more than one property in an LLC? Here is a possible seller’s objection under a lease option arrangment…after legal counsel the seller is told that such a transfer from them into a land trust with a LLC as beneficiary that certain legal rights might be lost. What is the best way to gain or regain the seller’s trust strong enough to do the lease option deal?

Re: Transferring properties to LLC. - Posted by phil fernandez

Posted by phil fernandez on December 18, 1999 at 12:13:26:

You can put as many properties as you would like into a single LLC. One of the resons I created a bunch of them, is so I could put each individual property that I own into it’s own LLC. The reasoning behind this is to spread out your exposure to lawsuits.

Example : If a tenant who lives in a property that’;s in LLC 1 decides to sue. They cannot sue me personally because I do not own the property. LLC 1 owns it. They can sue LLC 1 , but not LLC 2, LLC 3, LLC 4 or LLC 15. These other LLC’s have nothing to do with either LLC 1 or it’s property that LLC 1 holds. You are spreading your risks.

In my state it costs money to set up the LLC’s , I used a lawyer, the recording fees for the property transfer into each LLC, and a $15/ year fee per LLC. If you have 15 properties in 15 sepearte LLC’s it can get quite expensive. To limit the amount of LLC’s you could put 2 or 3 of your low equity properties in a single LLC. If that particular LLC gets sued, there would not be much equity to go after.

Bill Bronchick has some excellent courses on LLC’s and protecting your assets that can be ordered from this site.

Re: Transferring properties to LLC. - Posted by Chris (FL)

Posted by Chris (FL) on December 18, 1999 at 18:46:14:

What’s a ballpark cost figure on forming an LLC ? Is it about as much as setting up a Corp. ?