How do I transfer my properties to my LLC. I just registered for an LLC last month, Jan. 06. I currently own 2 investment multi-family properties and would be closing really soon this month on the other properties that I’m buying. I’d like to put them all in my LLC. How do I do it?
Thanks to all!
Moving it to your LLC will protect your personal assets, but the property is still partitionable and subject to liens and encumbrances. My suggestion is to place it in a land trust before assigning the interest to your LLC. Your property will be shielded from liens and encumbrances, including IRS liens, and you have total protection.
I used my Title company to move properties into a LLC. They do a Quit Claim. The first one cost me $10 now they do it for free because of the relationship I have built with them.
Some investors have a different LLC for each property and some put up to 10 in a LLC. 
Good Luck
Thanks to all who responded. I really appreciate it.
I’m buying a property now. I also want to have it under my LLC. The attorney said that I can transfer it to my LLC after 4-6 weeks after closing. I’m not sure if the same holds for other states or other cases.
Eh, I’m not crazy about using a quitclaim deed for anything… it’s a pretty limp transfer of title, and might raise red flags when your LLC tries to sell it.
You basically need a deed… special warranty in Texas works well.
I have offer out on two properties. They are both REO. They refuse to worded as buyer = “My Name and/or assigns”. My mortage offer told me that it cannot go in LLC name directly, they have be on my name and then you can transfer it but lender may invoke “due on sell” clause if they are really anal, but will keep silence in most case… this is getting complecated in Texas…Help…
Your lender is correct. I suggest that you buy it in your own name, then transfer it to a land trust. You are allowed to do this under Federal law. Then assign the beneficial interest to your LLC. The lender cannot invoke the DOSC, even in Texas.
Land trust? How long should we put it in land trust? Correct me if I’m wrong but one cannot refinance during the time that the property is in Land trust. Right? Therefore, one cannot use it or the equity as collateral while it’s in a landtrust. It sounds good but I’m not sure if we can do all of the above if it’s under a landtrust.
Pls. advice. Thanks!
mtnwizard, you are wrong, flat wrong.
A transfer of the beneficial interest in a land trust DOES violate the due on sale clause. I don’t care how many times you say it, it’s still wrong.
Now, it’s not a crime to violate the DOSC, and lenders generally don’t care as long as they are getting paid, so as a practical matter, it may not matter.
But you should really stop posting incorrect legal advice on this forum. It’s irresponsible.
Drew, can you please explain this a little more? I understand that a general warranty or special warranty deed is better than a quit claim fror the assurances of clean title but don’t all three transfer title. My understanding of this is limited but I would appreciate your input.
Drew,
You are flat wrong. A transfer of a beneficial interest in a land trust DOES NOT violate the DOSC. You are confused. You are referring to a transfer of OCCUPANCY RIGHTS in the property, not a transfer of a beneficial interest in the trust, two entirely different animals.
Here is the law:
(d) Exemption of specified transfers or dispositions
With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender MAY NOT exercise its option pursuant to a due-on-sale clause upon—
(8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which DOES NOT relate to a transfer of rights of occupancy in the property;
Apology accepted.
Da Wiz
Cowboy – you are right. You cannot refi while in a land trust. I take it out of the trust right before my refi is about to close, then immediately put it back into the trust after the refi closes. I have done this several times.
What’s the minimum months or years that I could put it in a land trust?
Thanks!
Cowboy,
There is no minimum term of a land trust. Maximum is 20 years, however you can terminate the trust at will at anytime and re-establish after you have completed your refi.
Da Wiz
Thanks so much for the info. It really helps.
The transfer of the property into a trust does not violate the DOSC.
The transfer of the beneficial interest in the trust does violate the DOSC.
This is an important distinction.
You, sir, are the one who is confused.
The law you quote requires that the “borrower is and remains a beneficiary” – meaning that if the borrower transfers the beneficiary to a third party or an LLC, it would VIOLATE THE DUE ON SALE CLAUSE.
You really shouldn’t be so condescending, especially when you are wrong. It makes you look rather foolish.
The Seller ALWAYS retains a beneficial interest in the NARS trust until termination, and assigning a beneficial interest in the trust (not the property) does not affect the DOSC at all – never has, never will. At least a 10% beneficiary interest should always be retained by the seller, in order to conform to the IRS’ 10% rule (i.e., no land trust beneficiary may hold less than a 10% interest); to discourage “Due-On-Sale” disputation; and to avoid a property tax reassessment.
A Beneficial Interest under the Land Trust is considered to be Personalty, not Realty, therefore a Transfer of Interest need not be witnessed or notarized. It is done as simply as transferring your stock certificates in your corporation - no closing costs, no documentary stamps or recording fees.
I think you are a bit confused because others on this forum advocate that the seller give up his entire beneficial interest through a Power of Attorney, in which case you are correct, that would be a violation of the DOSC.
However, once the property is placed in the trust and deeded to the Trustee, the DOSC becomes moot and subsequent transfers of beneficial interests in the trusts are legally unrecorded events re personal property, not realty.
If the NARS land trust violated the DOSC as you say, the program would not be approved as continuing education through the California Dept. of Real Estate.
I realize it is difficult for an attorney to admit he is wrong, but sir, you are wrong, and I am not the one looking foolish. Have a nice day.
Da Wiz
I know you’re trying to make money with the NARS trust thing, and I agree that it’s unlikely a lender would care… but it is a violation of the DOSC clause. Whether or not the transfer is recorded is really irrelevant to whether or not it’s a violation of the DOSC… but of course, if a lender does object, then it claim that you’re unrecorded transfer is, I don’t know, fraudulent?
You just act like that the trust idea is perfect and has no downsides. I don’t really have a horse in this race, but I can’t say I agree with you.
Let me just advise anyone reading this board not to take my word for it or mtnwizard’s word for it… before you use a land trust, get an attorney from your state to look at the paperwork.
I would be happy to refer you to attorneys who know what they are talking about re the land trust and DOSC. Our legal staff reviews every document before implementation. You apparently don’t understand or want to understand for whatever reasons, the distinction between realty and personalty.
In the case of my own house, I placed it in trust, triple net leased it to my tenant and gave him a beneficiary interest. I then changed my homeowners insurance to landlord insurance and notified the lender. I told him of Garn-St. Germain. He was combative at first and talked with his legal staff. Turns out they were powerless to do anything. Case closed.
Have a nice day.
Da Wiz
Garn-St. Germain (FDIRA of 1982) addresses this issue succinctly. It’s worth a read, Drew and will dispel any reservations of what MtnWizard is teaching.
Regards,
Dave