Question. I have two rental properties under my name. So I got a LLC, I want to transfer the properties to the LLC. Would I be able to transfer the deeds even though I have mortgage loans on them. Im trying to moved them out my name because banks are denying me for more home loans. So hoping once I moved them Ill buy more.
Silas Garner: You could trigger a due on sale clause where the mortgage company can have to pay the mortgage. Although I have heard of investors that have done it and wasnt a problem. Ive never done before
Cheyenne Klein: Never heard of a due on sale clause. Ill look it up to understand it more.
Cheyenne Klein: Im back, yea that would suck. I would just cancel it keep it under me if the mortgage company was to try to pull that
Silas Garner: Cheyenne Klein: although I have heard people doing it and was never an issue. I have 2 rentals and decided not to do it.
Silas Garner: What I ended up doing was purchase an umbrella policy under my homeowners policy
Nina Sanchez: Even if you transfer the deed to your llc the mortgage would still be in your name. You would have to try and get financing through your llc and purchase them from yourself or something like that to be able to buy more
Cheyenne Klein: Nina Sanchez: why wouldnt the name on the loan change to the LLC?
Journee Castro: Cheyenne Klein: Because the LLC didnt buy them.
Cheyenne Klein: So when I transfer the deed all I would have to do is refinance under the LLC. Wouldnt that work?
Maggie Snyder: Change it to the llc upon refinance
Nina Sanchez: Cheyenne Klein: yes that should work. But your llc will be charged a bit higher interest since they are investment properties. From what I understand.
Cheyenne Klein: Maggie Snyder: I would have thought that would work
Nina Sanchez: Cheyenne Klein: also your llc would need to have credit score in order to also purchase them or refinance them. From what I gather
Amy Adkins: Cheyenne Klein: 99% of the time, Lenders wont evoke due on sale.clause. As long as payments are on time, they mostly dont care
Emersyn Greene: Cheyenne Klein:, how many properties do you own? I teach how to purchase 10 properties in 10 months. Its pretty simple if done correctly. If you are being declined for having too many properties, you need to do a commercial wrap and consolidate the pro…See more
Cheyenne Klein: Emersyn Greene: I see you live in Austin. Im just around the corner. Maybe I can invite you to dinner and talk. 🙌ðŸ¼
Emersyn Greene: Definitely
Emersyn Greene: You are welcome to come in and chat as well.
Alani Salazar: Unless your LLC has been licensed for two years, shows income and taxes no lender will lend to an LLC. Finding a lender in general to lend to an LLC is going to be challenging. Its a risky loan.
Emersyn Greene: This depends on desktop underwriter and what docs are asked for. The past 7 loans I have done for a self employed borrower only required 1 year filed tax returns.
Alani Salazar: True if he is self employed. Not lending to a newly established LLC. You wont even get DU to run on just an LLC name.
Maggie Snyder: Carlos Quite frankly I have never done it but I asked my loan officer that since I am trying to do the same. He told me the quickest way to change it from personal to business is through a refinance. Just call your bank and ask them. I am sure they can help you better
Maggie Snyder: Also, be sure that you have your LLC mostly divided under someone else and that you are LLC is not considered a disregarded entity. It would be almost like not having a protection under the LLC at all. In any case, you still want to talk to a pro about it
Kamryn Steele: Alot of times you can talk to the morgage company
Giuliana Haynes: Noooo put them in to a trust name llc beneficiary of the trust and dont name the trust after your name
Cheyenne Klein: Im confused. Can you explain a bit more please?
Delaney Chapman: Hes trying to outline an asset protection plan. Seek out an attorney.
Charlotte Stevens: Yes please.
Delaney Chapman: Call more banks.
Giuliana Haynes: If you transfer directly into an llc it can trigger ur dueon clause or at least bank can charge 1% of your outstanding loan balance but if u put into trust nothing happens
Cheyenne Klein: How do I find or make a trust
Giuliana Haynes: What state are in its a revocable trust u can do it urself but u should talk a r e asset atty to help set up your short and long term exist plan i personally dont use atty but i have studied all their voodoo and more so i do it myself Or find someone who know its takes more than just buying and selling r e lots of traps in this game
Joseph Stephens: Common wealth trust
Amanda Ortega: Typically banks have a clause saying they can call the loan if you do something like that. I talked to my real estate attorney, he said in 26 years of business hes seen it happen one time, because the owner called the bank and told them he was doing it. DO NOT TELL THE BANK YOURE GOING TO DO IT. Just do it and 9/10 they do not care because they wont notice. I would call an attorney but legally Im not sure they can give you that advice. I got it off the books. Good luck
Giuliana Haynes: Better safe than sorry a trust solves than issue
Cheyenne Klein: I have a meeting with an attorney next week about transferring. Just wasnt sure if he would have any more idea about the loan
Giuliana Haynes: Carlos make sure he is a asset protection atty
Delaney Chapman: Lmao. Call an attorney.
Emersyn Greene: You can not change the loan without doing a commercial refinance. Then it can be put in your business name on the loan. Deeding the property to your business is possible. A title company can do this for about 75 bucks. As long as you dont miss payment, you should be fine. Still a good idea to chat with an a real estate attorney.
London Cross: Due on sale is POSSIBLE but talking to numerous attorneys and brokers, I found out that rarely a lender will call loan due because properties are moved under LLC. IF are paying on time and didnt have any late payments, they would never call a loan due. Now. To answer your second point; by moving properties to LLC; you are not transferring mortgage. Loan will still show up in your credit score and would affect your DTI.Only way to circumvent this would be to acquire more than 4 units and under an LLC.
Cheyenne Klein: And thats the problem Im having. I cant go past two now. I have exhausted my real estate funds and they see me as a high risk even though Im not making two mortgage payments. So how can I change the name on the loan to the LLC? Or another way around it to free up my funds
London Cross: Cheyenne Klein: you cant change names on existing loans without refinancing them on LLC. There is no way to do change mortgagee on a loan. I would suggest to acquire new properties under LLC so you will fall under commercial loan.
Alani Salazar: Take out a Hard money loan to purchase more until you have a full year of rent on your tax returns for the other two
Lincoln Bates: My understanding is even if you quit claim deed to the LLC mortgage will still be in your name and wont help you in qualifying for the more if you are having issues due to too many loans.
Cheyenne Klein: Yes. Need name on loans changed to the LLC
Dean Grant: Either get a trust or umbrella policy for the two units in question, and moving FORWARD, purchase new properties in your LLC. Chances are new purchases in the name of your LLC you will still have to personally guarantee anyway. How can you increase y…See more
Cheyenne Klein: Dean Grant: whats an umbrella policy and what does it do. Also how do I apply for a trust
Lilith Francis: Simply put, a lender is not going to take your name off a mortgage unless you pay the loan off.
Dean Grant: Honestly, before you keep moving forward with purchases, I would get straightened out with 1. A good CPA knowledgeable aboutreal estate investments (they can likely refer you to the other two) 2. A good lawyer that is again, knowledgeable about real e…See more
Dean Grant: In PA if I were to transfer property from my personal name into an LLC, I would have to pay transfer tax on the transaction. It gets expensive. I dont know if that would be the case where your properties are held, but like I said, in the future it m…See more
Emersyn Greene: Do not quit claim the property. It will not work in TX.
Valentina Love: Cheyenne Klein: – if its a sole proprietorship LLC, the bank will consider it part of your debt regardless if its in your personal name or sole LLC. Banks will look at your overall DTI but once a property is seasoned theyll count the income. Make sense?
Emersyn Greene: Sorry man, this is wrong. Income can be used immediately. 75% of the current lease or 75% of the 1007 amount which is the rent schedule on the appraisal. You can use the income immediately.
Valentina Love: Emersyn Greene: pass on your banking contacts. Apparently the ones Im dealing with are all wrong!
Emersyn Greene: Contact me through pm
Emersyn Greene: Im a loan officer myself. Im licensed in Texas.
Leighton Mendoza: Following
Henley Rodriguez: Regardless of what you transfer the property to, llc, trust, corp, etc. the loan is still in your name as you signed for it personally. Because an LLC is a pass through entity for tax purposes, the bank is still likely to consider it part of your debt even if you managed to refi in the LLC.
Giuliana Haynes: Not for title purposes for taxes yes title no
Peter Burgess: Great advice. What are you gonna do?
Carter Collier: Get a loan using a LLC to buy more properties. Im a loan officer for First American Bank. We can borrow to your LLC as long as the building (1-4 units) cash flows and have a guarantor with a 660 credit score. Send me an email at [email protected] and I will send you info on our LLC loan.
Cheyenne Klein: Thank you.
Thiago Howell: At one point lenders stop lending. Thats when you need to start learning about private lenders.
Cheyenne Klein: Name a few?
Emersyn Greene: This isnt true. If you run into this, it just means you are dealing with a lender that doesnt understand investment.
Thiago Howell: Cheyenne Klein: no one tells you who their private lenders are. Thats the reason they are called private lenders. They are people you know, or have developed a relationship with such as doctors, attorneys, people with bank Cds, ROTH IRAS, etc.
Thiago Howell: Emersyn Greene:, yes this is True about lenders, traditional lenders stop loaning money usually after about 5 deals. If the loans are not paid off. Then you have to start using Hard money or Private money to do your deals. Depending on how large of a Hard Money Lender or Private Money Lender you use (how much money they have) will depend on how much money they can loan out at one time.
Michelle Hughes: Better build business credit with ein first dont personal guarantee NOTHING
Cheyenne Klein: Whats ein?
Michelle Hughes: Employer identification number
Michelle Hughes: Irs issues it to llc, c-crop etc
Cheyenne Klein: Oh yea Im getting one already.
Michelle Hughes: Follow Credit Suite they have software that will help you build business credit with your ein only no personal guarantee also give plenty of free advice if u dont wanna pay
Raven Doyle: Yes, you can! If you own multiple properties, you can “insulate†each property from liability claims by setting up separate LLCs for each property. If you have all of your properties under separate LLCs, then if someone files a lawsuit pertaining to one of your properties, then the rest of your properties will not be affected by the lawsuit. This effectively separates and protects each of your properties and you from personal liability.If you create an LLC first, then you can buy the property under the LLCs ownership, in which case the property deed will be in your LLCs name.When you create an LLC, you should create a separate bank account for your LLC. That way, your personal expenses are separated from business expenses. This makes it easier to claim business expenses when it comes time to do your taxes.To do so youll need to transfer the deed for the property to the LLC, its called a “transfer title.†Converting the property to an LLC after the property purchase may trigger new taxes, specifically a Title Transfer Tax, check on that.Whether you have one property or several, you will benefit from pass-through taxation and protecting your personal liability, which is the main goal of an LLC.Also, youll need to notify any tenants that the property is now owned by the LLC and update your rental leases to be on the safe side with laws.
Cheyenne Klein: Great info. How would you change the loan to make it say the LLC and not my name anymore.
Raven Doyle: In order to “transfer title†to the LLC, which means to transfer ownership rights to the LLC, you need to create a Quit Claim Deed and file it at your local County Clerks office. Quit Claim Deeds allow you to edit information on previously recorded deeds, like the one you currently have under your name.
Cheyenne Klein: Then would I just submit the paperwork to the bank once its all approved?
Raven Doyle: Yes, but before you do anything MAKE SURE your mortgage company/bank will not issue a due-on-sale clause.
Emersyn Greene: No, you cannot do a quit claim deed. At least not in TX. Real Estate laws here are much different than the rest of the US.
Emersyn Greene: Do not do this.
Willow Harper: Beware of “do on sell†clause
Madelynn Neal: I think you meant due on sale clause. On the subject of the OP, that will be a pretty neat trick….
Brayden Rowe: Following
Elijah Mcdonald: Id try two different options. 1) call around asking small community banks if they will give you a loan (many of the bigger banks wont lend out for this situation )2.) try to negotiate a seller finance if possible that way you down have to go through a bank to get a loan. Im currently doing this with 10 properties
Cheyenne Klein: Sup Simon! We need to link up when I get to taylor this weekend lol
Victoria Lawrence: Following
Hattie Matthews: Carlos, as many have said, a good option would be to create an llc for each property and cash out refi to be able to buy more with another llc.You could even put them under one llc, that way you can show a lender the multiple properties your company owns and it gets you a bit more buying power. Not necessary though. Im a mortgage broker that specializes in investment funding (fix and flips, refi cash out, long term holds, etc)Send me a message, Id be happy to go over some options with you.I have access to lenders that will do a refi cash out and not look at your credit (no minimum FICO score needed), or your income, or job, status, cash flow, etc. They just care about the property. Let me know if you think this is something that would intetest you.If theres anyone else here that thinks I can help with their next project, or even their current one, please dont hesitate to reach out. I love working with investors to grow their business and make their next move. Looking forward to hearing from you.
Andre Colon: Hello.. Hi I just went to ur page and did a fiends request for more info. Thanks
Hattie Matthews: Andre Colon: sent you a message
Jake Page: Use owner financing on all your purchases. F banks.
Ayla Swanson::
Nathaniel Patrick: Following
Ayla Swanson: Ask an attorney. Chg of ownership could violate mortgage
Ayden Gonzalez: Its advisable to separate each property into its own LLC. The ideaIs that when you get sued inside one LLC, they cant take your personal property or the property inside the other LLC.
Giuliana Haynes: Its less expensive to put them in a trust first make llc beneficiary for privacy throw in a nominee trustee ur name never show pretty hard to get judgment vs you
Cheyenne Klein: I messaged you
Ashton Franklin: Find another bank. You have to expand your network of banks. You also need to talk to a real estate investing aware lawyer to setup your entities properly to protect yourself.
Phoebe Wilson: .
Andre Colon: Thanks
Isabella Floyd: .
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