I agree with Rich and no legal advice intended and my suggestion is to assign your LLC entity beneficial interest in the trust for maximum asset protection features.
With a land trust there is no due on sale as long as you remain A beneficiary in the trust so why transfer title to your LLC…??? and risk that even if it is a perfoming note…
Natalie had a good point your credit is on the line so be careful since what if your partner walks away and you are left holding the bag…??
Feel free to email me at coltrust07@gmail.com is I can help further…
My partner and I bought property using my name and credit because mine is better than his. We own it 50/50 but my name is the only one mortgage loan held by the bank. We would like to use a quitclaim deed to transfer the property to our LLC (we are the only members of said LLC). The lender will not loan to the LLC because it has no credit history. What are the repercussions if we don’t inform the lender of this transfer? I understand that they may ask for full payment and we’d like to avoid that. Will it void the insurance for the property? Any ideas in transferring to LLC aside from a quitclaim deed?
Posted by Natalie-VA on March 13, 2008 at 07:14:23:
Will your partner have the authority to buy, sell, lease, rehab, etc without your signature? Your good credit is on the line here. I would check with an attorney before I did anything regarding title.
(1) Insurance: you will need to have the LLC carry its own insurance (you will be able to drop your personal policy unless you are using your own home owner’s insurance to extend coverage to the rental).
(2) The bank CAN call the loan due, but they have more than enough problems with non-paying customers to bother with paying customers in the foreseeable future.
(3) If you assign the property to a Trust and then change the beneficial interest to the LLC, the ownership changes BUT there is no public paper trail. This may help.