Protecting Primary Residence

General Real Estate Investing
1

Hello,

I searched through many pages of this forum, and was hoping someone could possibly offer me the best answer to my situation:

I have a primary residence in the name of myself and my wife.

I currently have one rental property solely in my name. My wife knows about it (no secret asset stash! haha), but it’s just in my name.

I am about to refinance that rental to get money to buy one (possibly two) other rental properties. However, my debt-to-income would be such that I now need to “pull” my wife into the mix in order to get the financing needed to make this home purchase (and refi the current rental).

My wife is very uncomfortable with signing her name onto these rentals. She is very fearful that something would happen that would jeopardize our primary home, which of course concerns me as well.

I currently have a $2 million umbrella policy. What would be the best plan of attack to protect my primary home while successfully buying the one or two new rentals (with mortgages) and also paying for my current rental?

I see some mention of LLCs. If I hold a mortgage, can I transfer the deed to the name of an LLC? Or would the umbrella be enough to protect us? We are located in Maryland, if that means anything. I just need to find a way to protect my primary home that will alleve the fears of my wife.

Thank you very much for any guidance you can provide.

2

Is two million going to satisfy Mama when little Jimmy slips and breaks his neck on your property?

Refi the existing property into an LLC. Purchase the new properties in the LLC from the start.

3

Mark is right about taking title in your LLC. However, that will only protect your personal assets, leaving your real property partitionable, and subject to liens and encumbrances. Once you have taken title, I’d recommend placing all the properties into a land trust. This will shield the property itself from liens, encumbrances, even the IRS if properly structured. The LLC protects your personal property, the trust protects your real property and affords privacy and asset protection. Good luck to you.

Da Wiz