LLC question

General Real Estate Investing
1

Hi everyone;

I am purchasing a sfh for a rental with a partner. I am working on a LLC for us to hold it in and had some quick questions:

  1. how do we set up insurance with 2 of us owning?
  2. do I set up an LLC with 2 partners or is there a way to set it up as a joint venture? Which is best
  3. if we set up an LLC, how do we take the payments each month; ie set up a business checking account to hold funds/rent payments,etc.?

Thanks for any advice or suggestions,

2
  1. If you set up an LLC to own property, the LLC owns the property (not you). Therefore, you get insurance on your property in the name of the LLC.
  2. You can set up an LLC and opt to have it taxed as a partnership.
  3. Yes, you will need a business checking acct to perform all transactions thru. You need to get an EIN# when you set up the LLC. The bank will need this for your checking acct to be established. The EIN is like the LLC’s social security number.
3

The bank will also need a resolution to authorize the creation of the bank account.

4

Hello from Newbie-with a lot of questions :banghead

I am really concerned about due on sale clause- I am new at this and trying to set up everything

  1. LLC
  2. Bank accout
    and more- reading and scanning the website- really a lot to learn/know

Question?
If my Mortgage says NO and they say No to everything… Saxon Mortgage Company…

How do I get pass the due on sale clause and put my one and only property in an LLC?

PLEASE HELP-
SIGNED
CONFUSED but reading and learnging more each day! :help

5

There is no pass. The bank has no obligation to let you transfer the property to an LLC. I wouldn’t worry about the DOS clause too much. I have only seen it called twice. Most people on this board have never seen a bank call the loan.

I would be concerned with the fact LLCs don’t have benefits for a newbie that justify the cost. Why do you feel you need an LLC? Do you have significant worth outside this property? Are you working with partners? Are you going to manage the property yourself?

6

Efete,

The one thing I wanted to add to your questions is to ensure that you remember once you set up the LLC Business Account that you must cut payments from that account to each partner.

This is a must…