Transfer Of Property To An LLC
I recently formed an LLC in California for the purpose of investing in properties. I have had an officer of my company purchase the properties in his own name. I want to transfer the property to the LLC prior to selling the property. Is this an acceptable way of doing things, or do you have any other advice? It is difficult to buy in the LLC's name in terms of getting loans. Please advise. Also, should the property be gifted by the officer or sold for nominal consideration such as $1.
Hi FunInvestor! It's very wise of you to have set up an LLC as that is the most widely used business entity for real estate because of its great advantages versus other business formats. You can get some great details on transferring the property into the LLC from an individual from a book called "Real Estate Loopholes" by Diane Kennedy, CPA & Tax Strategist. This is a book in the Rich Dad's series. I suggest you get a copy at a local book store or online at Amazon or RichDad. Typically, though it's not a problem to transfer from an individual to an LLC but you'll definitely want to know all the details and make sure it's done correctly with the use of a professional. Until you have more experience under your belt, it'll be very difficult to get loans in an LLC. Until then - protect each property by setting up an LLC for each as well as setting up a business LLC. You might even consider setting up the LLCs as Nevada companies as Nevada has extremely favorable real estate LLC laws. (Again, read the book!) Best wishes to you! Jenny
Thank you very much. I actually have that book - I should have read it!!! So, you think it is beneficial to set up each purchase as an LLC as well? That does make sense. Thank you again.
In CT I just file a new deed in my LLC and leave the loan alone