Can/Should I use an LLC for my House Hack?

[Devin Gillespie]

Hello BP,

I am house hacking a SFR with an attached ADU. I currently have a tenant in the ADU and will use it as a short term rental when they move out. I have an active LLC that I ultimately plan to transfer my deed to when I move out.

Essentially I would like to inquire if I can/should use my business entity for the property if the home is in my personal name. I’ve been told that I could use the entity and lease through it, but wanted to verify that information and reach out for ways to scale.

Any information helps! Thank you!

[Matthew Brill]

Originally posted by @Irasa Downing:

@Matthew Brill can you put a 4plex currently in your personal name on the loan into a LLC by quick deed? If so, are there any watch outs or concerns?

In short yes. You can trigger the due on sale clause theoretically. I'm sure it has happened before but it doesn't seem to common, especially if you keep making payments. You would also have to add the insured on your property insurance to include the LLC. If it were me, and I'm not an attorney, I would quit claim deed the property into a revocable trust/land trust (if your state recognizes one), which is acceptable for estate planning purposes and won't trigger the due on sale clause. You can then make the LLC the beneficiary of the trust. But you wouldn't want to do any of this on a house hack.