LLC Legal Question
OK folks - this may be simple and I might be "over thinking" the questions but here goes.
Background:
I have 5 properties in my name
I have an LLC set-up but no properties are in the LLC yet.
I'm in the process of getting the properties in the LLC when I refiance ect - but don't have a set time.
Can I have new leases (when I get new tenants) made out between the LLC and the tenant, with an agent PM, without the properties being in the LLC? If so, is their a problem with setting up a bank account with the LLC as the account name and have the tenants make checks/MO out to the LLC? and thirdly, can I pay the mortage from the LLC account if the properties are not in the LLC and are in my name?
I'm assuming that I will have to do taxes with the LLC.
Thanks in advance.
This is just my opinion, I have done this on 2 properties and have had no problem.
If you are going to refinance then I would refi first- because it's much easier for you to get a loan than it will be for your LLC to get a loan-( they would want two years tax returns on the LLC). Also because the purpose of putting the properties in an LLC is to Limit your Liability to potential lawsuits etc. not transfer the mortgage liability--Right?
Then I would Quit Claim all the properties into the LLC, and have them recorded immediatly. Then I would open a biz checking acct in the name of the LLC, and prepare new leases for future tenants, and request current tenants to start making checks payable to the new LLC (you can even make an addendum to there current lease if they would prefer that). and yes you can pay your mortgage company's with this account -although I would note the account number and property address on the check.
And Yes you will have to file a seperate tax return for your LLC.
Note: I bet that after posting this 20 people are going to say that by QC'ing your properties to your LLC it will activate the due on sale clause in your mortgages-- so this advice is just my opinion, but I have never heard of anyone including myself who has had there due on sale clause called. Especially if you pay on time. Although I bet if I were defaulting on the mortgage they would find out about it and bring it up..
Just my 2 cents
Hope it helps