Re: another insurance ? - Landlord Forum thread

Re: another insurance ? by Greg on May 19, 2012 @10:44

Nicole, you have each property titled directly to you and do not have any of these in a trust, or any type of a corporation?

If so, I hope you have really good insurance. One good lawsuit that exceeds the insurance limits could take out multiple properties.

Personally, I have each property in it's own LLC. I hope I'm wrong and you have some type of corporation or trust formed. I've never seen a lawyer tell anyone to just put property in their own name with no protection.

Greg in Phoenix

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Re: another insurance ? by Anonymous on May 19, 2012 @13:15	[ Reply ]

Hi Greg- Do you know if a property that has a mortgage on it can be put into an LLC?

Re: another insurance ? by Nicole (PA) on May 19, 2012 @14:22	[ Reply ]

technically you would be transferring title to the property and your lender can call your loan on the due on sale clause if they want to. How will they know? because of the insurance policy change.

Re: another insurance ? by Nicole (PA) on May 19, 2012 @14:24	[ Reply ]

it's been quite a few years since I purchased anything but I believe the general theory was since "my" personal funds paid for the down payments and I personally hold the mortgages, the LLC doesn't stand on it's own and a good attorney will be able to "pierce" it's validity.

Re: another insurance ? by Greg on May 19, 2012 @21:16	[ Reply ]

Talk to another lawyer. Putting your properties in to a LLC will not cause the mortgage holder to call your loan. Not having yourself protected by a trust or corporation is like playing Russian roulette. Feel free to ask anyone on this forum and check out any bookstore. Do the research. It's cheap peace of mind. Best of luck, Greg in Phoenix

Re: another insurance ? by Doug on May 25, 2012 @08:19	[ Reply ]

That doesn't sound right to me. That would invalidate the purpose of an LLC. Also, I had a C Corp and an LLC and was allowed to fund their operation for quite some time with personal funds without invalidating the corporation. LLC laws vary from state to state, and checking with an attorney on how to avoid the scenario shouldn't cost all that much. Even if you have to have the LLC hold on to some of it's "shares" and buy them periodically from the LLC, or something. I'm sure there's a way to do it. And yes I've seen many properties in an LLC with a mortgage. Here a quick claim deed is used to transfer title to the LLC and the mortgage is still intact. Again, check with the attorney on how to do that. It's worth a few dollars to get the right advice.