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Transferring residential condo to a rental property in LLC
Posted on 8/7/17 at 11:58 am
Posted on 8/7/17 at 11:58 am
Thinking of buying a condo for fiancé and I to live in for 3-4 years then rent out. Would put 20% down now and take 30 year note, which we would pay aggressively. Say we want to buy a house in 3-4 years and transfer condo into an existing LLC solely to rent, what are my pitfalls? Let's say we'd have 30% equity by then. What do banks look for for me to be able to re-finance in LLC name? How terribly would this affect our ability to get a mortgage on the prospective house?
This post was edited on 8/7/17 at 11:59 am
1
Posted on 8/7/17 at 6:11 pm to boosiebadazz
You do not need to transfer to LLC to convert it to a rental.
Just get a good liability policy.
Just get a good liability policy.
Posted on 8/7/17 at 7:53 pm to ItzMe1972
I know. I want it separate, though. Just didn't know if there were different rules for refinancing a rental and whatnot
Posted on 8/7/17 at 10:13 pm to ItzMe1972
You don't worry about being sued, and having all your assets taken?
Posted on 8/8/17 at 7:00 pm to Rust Cohle
quote:
You don't worry about being sued, and having all your assets taken?
You don't understand how landlord liability or a commercial umbrella liability policy works do you?
Posted on 8/9/17 at 9:40 am to Fat Bastard
To answer your question it's not hard at all. I did it on 2 properties a few years ago. If you have 30% equity you'll be fine. You'll still be on the hook personally for the loan all the LLC does is help with liability protection.
Posted on 8/9/17 at 9:56 am to Rust Cohle
quote:
You don't understand how landlord liability or a commercial umbrella liability policy works do you?
Posted on 8/9/17 at 2:07 pm to Fat Bastard
quote:
You don't understand how landlord liability or a commercial umbrella liability policy works do you?
No, that's why asked the question.
I am a landlord. I created an LLC under the impression it was necessary to protect my personal assets. I have liability insurance on the properties. Isn't that the point of an LLC?
I have heard people have an additional umbrella policy, but not really sure on the reasoning. From what I have heard, people who get sued, get sued for the maximum of their insurance. So more insurance is not better, you just get sued for more.
I imagine it's not necessary to have a rental in a separate business entity, but isn't that a better choice?
This post was edited on 8/9/17 at 2:09 pm
Posted on 8/9/17 at 2:22 pm to Rust Cohle
quote:
So more insurance is not better, you just get sued for more.
The size of the insurance policy doesn't determine damages awarded by a court.
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