Due on Sale Clauses: What's your experience

[Kristyn Grimes]

Happy Thursday, BP family!

I am doing my homework on financing options that will work best for me right now in our current market environment. I've come across the concept of lenders including Due on Sale clauses when transferring the property from my name to my LLC. I'm curious how many of you have had this happen to you. Or have you done a million deals and never had this issue happen to you? What are your options if this occurs and what are your options, if any?

[Russell Brazil]

Most never get called because most never update their insurance to reflect that there is a new owner of the property. So in essence, most people who transfer the property into an LLC have no valid insurance policy on the home. If they did update the insurance policy, the lender would then be notified and issue a demand that the ownership interest be corrected or call the note due.