Warranty deed from LLC back into my own name?

General Real Estate Investing
1

This is kind of a weird situation. There is a problem with the wiring in the house that means few insurance carriers will write the policy. Because I made the offer in the LLC name (before knowing about the problems), one of the insurers will not write the liability part of policy because it’s under an LLC (they would have no problem doing it under my name).

Would it make any sense to buy the house with the LLC and then warranty deed it to my own name, so that I can use that insurance carrier? Will this cause a potential problem with the corporate veil of the LLC?

(I have not closed on it yet, it’s a HUD property)

2

I don’t see a peircing problem so long as you maintain the formalities. There is a fraudulent transfer concern.

A trust might be a better alternative. You can keep the transfers out of the public record and avoid transfer taxes.

3

Thanks BLL…

But what is the fraudulent transfer concern, if I’m not being sued by someone?

4

The fraudulent transfer law applies to future, unknown creditors at the time you made the transfer. It also applies for transfer with no consideration or transfer that make you insolvent. It is not limited to your current situation.