LLC - Landlord Forum thread 350895

LLC by Jason (PA) on February 26, 2017 @22:55

I just purchased a MF property and am interested in creating an LLC to protect myself against liability. How does this work if I already have the mortgage in my name? Is it too late?

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Re: LLC by Anonymous on February 27, 2017 @10:27	[ Reply ]

You might not be able to move that property to an LLC as it might be considered a sale by your lender who might call in your mortgage, if you have a due-on-sale clause. You can also lose any low-interest rate when you refinance, or you might not qualify for the mortgage anymore. You should run this by your CPA for advice.

Re: LLC

Re: LLC by P-Bone (NY and OH) on March 1, 2017 @11:50	[ Reply ]

The problem with an LLC is that it must be properly capitalized. Even if you form one and put the property in the name of the LLC, being that the LLC doesn't have the leverage or credit to get the mortgage, it would still be personally held by you. Since the LLC cannot stand on its own, a lawsuit would pierce the LLC to you personally. With that said, if you feel there is a concern, I normally recommend a large umbrella policy to cover any possible concerns that would run above and beyond what your current general insurance covers.

Re: LLC