Help needed! I have several properties and I want to take them out of my personal and transfer them to my business name (LLC). What is the best way to do this? I have mortgages on all of them and I know to change the financial responsibility I need to refinance. Any help would be appreciated!
You could make it a one step approach. Deed the property to the LLC. I prefer the 2 step. Deed them to a land trust and assign the beneficial interest to the the LLC. Your CPA can take care of exchanging the interest for interest in the LLC. The IRS doesn’t care because the beneficiary is the one that reports them on their taxes. No one else will know who the beneficiary is.
Thanks Bud! Since I posted this question I have done some research and found out about the land trust. I like the two step idea better also. Could I set up the land trust myself or do I need an attorney for that? Also do I need to notify my lender, insurance companies or record this information. Thanks again!
I prefer the one step approach. I would flat out tell the bank what I’m doing, via certified mail…after they’ve gotten some payments from me first. The VAST majority of banks (Countrywide being a periodic and odd exception) won’t care. In addition to being completely above board (no concealment, so no accusations of deceptive business practices or fraud), if the bank tries to call the loan due later, I have a strong argument that they waived their rights by not foreclosing when I gave them notice of the transfer. Using a trust does not “get around” due on sale, it merely hides the breach - and the cover up is often worse than the underlying issue. Nixon learned this the hard way, Clinton never figured it out.
John Hyre
Can you expand on the Countrywide comment? Do they actually call the loans if you transfer title or do they just tell you that you can’t do it, then not do anything?