Advice needed on moving an asset under a LLC

[Ron King]

Currently I own 1 rental property that is not free and clear of a mortgage. After further reading, it’s in my best interest to create an entity and move the property under the entity name. I’m hoping that this forum can provide the guidance on what steps I should take if any.

[Natasha B.]

Similar situation to Ron. The property however is not financed through a conventional bank, but a hard money lender instead. Can the property still be quit claim / warranty deed into the LLC? Would a similar "due on sale clause" apply in this case? Any assistance is truly appreciated. Thanks in advance.

[Bienes Raices]

I'm a newbie, so take this for what it's worth, but the general idea is to either quit claim or warranty deed the property into your LLC, depending on your state, I believe. You current mortgage will have a 'due on sale clause' that the lender technically could call when you transfer ownership, but very rarely does in reality.

[Josh Green]

bienes is correct. i've not heard of any lender calling the note, but it is possible. be sure to update your insurance to cover your llc and you as additionally insured as well.

[Dave Versch]

Check with your current mortgage company about the "due on sale clause". Some banks have them, some don't. Those that do sometimes don't enforce them, but I wouldn't take that chance personally.

[Natasha B.]

Similar situation to Ron. The property however is not financed through a conventional bank, but a hard money lender instead. Can the property still be quit claim / warranty deed into the LLC? Would a similar "due on sale clause" apply in this case? Any assistance is truly appreciated. Thanks in advance.

[Josh Green]

when it comes to the HML, id certainly ask directly.

[Jon Holdman]

You want to be careful doing this if you have a hard money loan you're expecting to refinance. The refinancing will become much more difficult if you move it into an entity. Wait until you've done the refi.