Posted by Chad (MD) on July 29, 2008 at 18:51:26:
Wendy,
I honestly don’t know, but others on this board do.
But for future reference, if you take title in the name of an LLC (or, even better, in the name of a land trust with an LLC as beneficiary), then transferring title won’t be an issue.
My name or the LLC name - Posted by Wendy
Posted by Wendy on July 27, 2008 at 08:48:23:
I have a property that I am planning to rent out. The deeds are in my name but I have also formed a LLC. I would like the income to go into the LLC but wanted to know if it would affect any attempts at any furture dealings with the banks (i.e refi, line of credit) if the funds are shown going into the bank account of the LLC and not in an account in my name.
Re: My name or the LLC name - Posted by Natalie-VA
Posted by Natalie-VA on July 29, 2008 at 10:03:55:
Wendy,
I’m not sure if your question was addressed. If you want to obtain institutional financing at a later date, you may have an issue if the property is titled in your LLC’s name. You might want to talk with an attorney and CPA to weigh the pros and cons of titling real estate in your personal name versus LLC. It’s definitely not a simple answer.
–Natalie
Mr. Landlord’s advice - Posted by John Merchant
Posted by John Merchant on July 28, 2008 at 08:35:31:
Jeffrey Taylor, “Mr. Landlord” which you can find quickly via Google, wisely says he tells tenants he’s just an Assistant Rental Manager for his owner company (which he owns of course ;)and he says never own or rent anything you personally own.
The bank doesn’t care whether it’s in your name or the LLCs.
Re: My name or the LLC name - Posted by Alexander (FL)
Posted by Alexander (FL) on July 28, 2008 at 07:57:48:
The property should not be in your name, especially if you’re planning on renting it.
Banks look at you credit score for a loan. They don’t care what account is used for rent payments.
Re: My name or the LLC name - Posted by Bob In Indy
Posted by Bob In Indy on July 27, 2008 at 16:16:02:
Hi,
There is nothing unusual about using your LLC as your property management company and having the income go into the LLC.
Re: My name or the LLC name - Posted by Wendy
Posted by Wendy on July 29, 2008 at 16:38:53:
Thank you for all that answered. What I am asking is, I have a property that is titled in my name. When I have the current (inherited) tenant pay the rent, can I have them pay in the name of our LLC or does it have to be in the name under which the property is titled (which is my name).
So you are saying that when you buy - Posted by Rich-CA
Posted by Rich-CA on July 31, 2008 at 18:43:14:
you buy in the name of an LLC and not in your own name. What lenders still do this? What interest rates are they offering? Is this commercial or conventional loans? These are important issues to resolve because if its commercial, its more expensive. If its conventional, very, very few lenders will allow title to be taken by an LLC; if they do the interest rate is much higher, and you will still be hit up with a personal guarantee requirement. These loans are more expensive AND in some jurisdictions (such as CO) a single member LLC provides no protection from creditors. Oh, and before you toss out the NV LLC, be aware that a lender is most likely to sue in the jurisdiction where the property is located, which means a NV LLC operating in CO will be tried under CO law in CO courts and the money spent on the NV LLC is just wasted.
Re: My name or the LLC name - Posted by Wendy
Posted by Wendy on July 28, 2008 at 18:43:49:
Alexander, so you are saying the property should NOT be in my name? It was bought in my name but I want to pass the rents in my company’s name.
Re: My name or the LLC name - Posted by Natalie-VA
Posted by Natalie-VA on July 30, 2008 at 06:10:59:
The simple answer is yes, they can pay the LLC. You can do as others suggested and set it up as your management company. You should consider having a formal operating agreement for the LLC also. An attorney might also recommend other docs.
–Natalie
Re: So you are saying that when you buy - Posted by Alexander (FL)
Posted by Alexander (FL) on August 01, 2008 at 09:00:38:
Uh?
I have taken title in the name of an LLC, especially in larger deals where other members or companies are involved.
An LLC is also the way to go when a foreign partner is involved in the deal.
Depending on the deal and the structure desired, I will use the LLC, not ALWAYS.
Sometimes corps or land trusts are more appropriate.
Smaller deals will always require a personal guarantee but you can take title to the property in any legal entity you want.
Interest rates are a negotiable item even with large banking institutions, rates can be the same or better than a conventional loan.
Over the years, I have done it many times.
For larger deals, banks will look at the deal itself. Standard lending guidelines no longer apply.
Re: My name or the LLC name - Posted by Alexander )FL)
Posted by Alexander )FL) on July 28, 2008 at 20:02:03:
There are many good reasons why a property should not be titled in your name.
And if you have more than one property, it would be prudent to title each property differently.
Asset protection is the game.
Re: My name or the LLC name - Posted by Chad (MD)
Posted by Chad (MD) on July 28, 2008 at 19:51:05:
As I think everyone agrees, it is no problem to collect rents in an LLC’s name – no matter what name the property is in or what name the mortgage is in.
In fact, I would recommend using one LLC as a property manager (as Bob Indy said). That simply means that tenants pay their rents to that name. You can also make your mortgage payments from that LLC.
In a perfect world the LLC you use for property management doesn’t own anything. If a tenant (or someone else) decides to sue, they will look into suing this company, which has no assets.
Also in a perfect world you shouldn’t own rental properties in your own name because if someone sues you as the owner, your personal assets are at risk. But that’s a separate issue from your question.
Re: My name or the LLC name - Posted by steve
Posted by steve on July 29, 2008 at 16:40:54:
Alexander )FL)
Insurance is just as important as asset protection.
Re: My name or the LLC name - Posted by Wendy
Posted by Wendy on July 29, 2008 at 16:41:06:
Chad,
Thanks for that answer. Now I have another question, how do you move a property that is titled in your name to your LLC? Is it an easy process?