More real estate & LLC questions!

[triple J]

I know owning rental properties in an LLC has been discussed before in another post http://www.thefastlanetomillions.com/showthread.php?t=675 and I had some questions that I thought I could re post and possibly get answered. Sorry if I'm beating a dead horse!


Diane says...

I ALWAYS buy with LLCs. Period. Put it this way - the first black mold case in Dallas, TX settled for $125 million. My umbrella policy isn't that big. I'm not sure anyone's umbrella policy is that big.

My main question is about transfering the properties without triggering the due on sale clause. What's the best way to handle that?

We know it is very difficult to get loans in an LLC if you're buying residential properties. So for those of us that currently own residentials in our own name (my husband and I have 13 combined), what should we do? Is the best thing is to Quit Claim to our LLC? Should we write a letter to our banks making them aware of this? Call them? Have a letter from an attorney? I think the way the banks find out is when the insurance changes?

Currently, I have an umbrella policy. Would I need to keep it for my primary residence and autos? Would I need an umbrella over the properties in the LLC? Or just keep a ton of debt on the properties and no $$ in the LLC bank account?

Thanks in advance!

 

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[biophase]

Personally, I've quit claimed or maybe warranty deeded them over to my LLC. I updated the insurance too.

I think it would be crazy for a lender to enforce the due on sale clause in this climate. They've got enough non paying mortgages to worry about one that's current. If they actually want to take your property back, could they even sell it to cover their costs?

Also, I believe that you have 30 days to correct things if they do come after you. Then all you'd do is quit claim it back to your name.