Moving Property To LLC Without Trigging The Due On Sale

Comments(10)

• 
  JohnMerchant3rd November, 2003

  I agree with your lawyer.
  
  Whereas the Garn St. Germain Act does protect your right to deed to your own trust, it does NOT (nor does anything else I know of) give you the right to deed to any other entity, such as an LLc or Corp.

• 
  RoyalK4th November, 2003

  Thanks for your reply. How then take advantage of all that a LLC has to offer as far asset protection and tax incentives? Everything I have read says that this is the best way to hold property. Is just that one has to work with a lender that understands you situation? How does a newly established small closely held LLC establish credit enough to get a mortgage on investment property?
  I am sorry to overload you with these questions, but I am open to all opinions and ideas.
  
  Thanks, Royal K

• 
  clear2close4th November, 2003

  How 'bout deeding to a Land Trust that shows the LLC as the sole beneficiary and you as the trustie? Is that gray enough to work?
  
  
  hope this helps,
  clear2close
  [addsig]

• 
  hibby764th November, 2003

  Your second question should be a separate post.....
  
  With a newly established business, they'll look at your credit personally as well as your financial situation and use that as a basis for giving (or not extending) credit to you for 2-3 years.
  
  Transfer the property into a trust, with you (current owner) as the beneficiary. AFTER that has been done, change the beneficiary of the trust. DO NOT record the second document. You don't need to, and you shouldn't for what you want to do.

• 
  ccoons4th November, 2003

  In situations such as this I have my clients deed the property into a Land Trust then assign the beneficial interest into an LLC. Remember that although the Garn St. Act does not apply to all situations (fed backed only) most lenders are ignorant of that fact and will not call in the loan. Additionally, it does not look good for the banks investors to call in notes thus, I will often tell my clients to deed the property directly to an LLC.
  [addsig]

• 
  theblacktruth4th November, 2003

  What is the benefit of Deeding to an LLC as opposed to a corporation or other entity?

• 
  reibyme4th November, 2003

  Quote:Listen to your lawyer.
  On 2003-11-04 11:19, ccoons wrote:
  In situations such as this I have my clients deed the property into a Land Trust then assign the beneficial interest into an LLC. Remember that although the Garn St. Act does not apply to all situations (fed backed only) most lenders are ignorant of that fact and will not call in the loan. Additionally, it does not look good for the banks investors to call in notes thus, I will often tell my clients to deed the property directly to an LLC.

• 
  RoyalK5th November, 2003

  Thank you all so very much for replying to my inquires. I think that deeding the property to a land trust with the benefical interest being the LLC will work. I am going to discuss this further with my lawyer.
  
  Thanks
  Royal K

• 
  davmille9th November, 2003

  For what it's worth, you might want to consider just leaving it in your name and putting any new properties in the LLC name. One way or another your probably going to want to divide up the ownership at some point, even if its between different LLC's.

• 
  marcoolivas9th November, 2003

  Hi, you have no problem if you just transfer the tittle to your LLC, just make sure you own 100% of the LLC's shares, as far as getting another property, you will do the same thing, get the property first on your name, then do the transfer to your LLC, since this is not a commercial loan, the bank will only ask you for your credit report and personal finances. whenever you will buy a commercial property as a multifamily (5 units or more), then the bank will ask for the LLC's balance sheet your credit report and your personal balance sheet .
  [addsig]