Transferring Property & Liability
I have my 1st rental and I am thinking about transferring the title to an LLC that I will open with a new bank account and enough insurance. Is this the right way to go? Am I missing anything?
Please help!
look before you leap.
The transfer may trigger the DOS clause in the mortgage
insurance for an LLC is very expensive when compared to an individual
is lots of liability insurance and holding it personally OK?
You inherited her 5 years ago. How long has she been in the unit total? Do you have pictures or some written record of the condition of the unit when she moved in, when you bought it, or at some other point in time? If you have nothing to record the condition of the property at a point in time, then she can say it was like that when she moved in.
You are not suppose to take from her security deposit "normal wear and tear". My theory is that I have lived in my house for 15 years and have only had the walls painted twice, and that was to change the color. I do not consider a repaint normal wear and tear. I also do not consider torn up flooring or stains normal wear and tear. Now matted carpet would be normal wear and tear. That is why I do not use carpet in my rentals. From you list, my opinion is that chaulking and worn carpet is the only "normal wear and tear".
Is she moving out or are you trying to fix some of these items now and want to use her security deposit for the repairs?