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Updated about 3 years ago,
Marital property ownership in community property state
Hi! Newbie investor here.
I live in a community property state (TX) and purchased two homes while I was still single. I converted the first home into a long-term rental and moved in to the second property. My boyfriend later moved in with me into the second home and about a year later we got married.
It is my understanding after talking to a local property lawyer that because 3 requirements were met, the rental property is still considered mine as a sole owner (the 3 conditions being: 1- asset was purchased before marriage. 2- we never lived there together as a couple. 3- all income & expenses for the property were kept separate from joint funds and are easily accountable).
Fast forward to today. I have decided to sell the rental property to diversify my portfolio, and have set up an LLC in my name only with its own new banking accounts that the funds from the sale are being deposited into as I type. That said, my marriage has been on shaky ground and while I'm hopeful that we will continue to work things out, I'd like to continue to protect my (sizeable) proceeds from the first property as a separate asset in the event that things do go south. My husband and I talked about this before I sold the home, he signed a non-homestead affidavit, and was not present at the sale closing, so this is all above board & openly (if maybe a bit begrudgingly) accepted by him.
So here is my question:
What is the best way to reinvest this money into new properties without getting into any legal tangles about co-ownership now that I am married? Is purchasing through my LLC enough?
And as a follow up- Will applying for financing muddy the waters of ownership?
Thanks!!