Cannot Put Title In My LLC
I am closing on a 2 family (plan to rent both units) and am purchasing with a mortgage from Wells Fargo. I had planned on holding title in the name of my LLC and not personally, even though I am sigining personally for the mortgage. I am being blocked by Wells Fargo on holdiing title in the name of my LLC. I am not too happy about the potential liabilites of owning this property personally. Does anyone have any recommendations on how I could get the property into the LLC now or after I close title or if I am not able to do so, about any specific extra insurance I may want to get? Thanks in advance for any advice...
Best.
You may want to try to tell Wells Fargo that you want to put the property into an LLC for "estate planning purposes". I've heard that this works well.
If that doesn't work, you can surely close in your own name and do one of the following:
1. Simply transfer the property sub2 the existing mortgage to your LLC. Your LLC just starts making the payments but you risk the due on sale clause. Not a big deal as long as you make your payments.
2. Set up a trust with yourself as the beneficiary. Then you can do one of the following:
A) Transfer 100% of the beneficial interest to your LLC. This document is not recorded and it is unlikely there is any way the bank would find out. However, you still are violating the due on sale clause here.
B) Transfer 90% of the beneficial interest to your LLC but keep 50% of the voting rights. This does not completely leave you out of liability because you still own 10% of the property but you do not violate the due on sale clause.
Insurance in the name of an LLC will likely be higher because you are not tying the insurance to your personal residence. Although insurance companies may give you better rates by doing so, this is not a good idea. PM "norrist" for more info on insurance.
All in all, these are some ideas for you. If you want further clarificiation, please ask!
Thanks for the insight.
Best regards!