Applying as an individual and then transfering rights to an LLC

[Juan Lopez]

Hello all:

I was hoping someone here could help me with a current situation. My partner and I want to buy rental properties (single houses) by applying as individuals to get better conditions on the loan (interest rates, closing costs, etc) but then want to do a quitclaim deed and transfer rights to an LLC to protect our total networth. I know banks could execute a due on sale clause but in reality that is not common, as long as I pay on time. My question is, I know that by transferring the right to an LLC we will be protecting our networth, however, the loan would still be under our names. Does this last mean anything at all? What other considerations should I look at? Is an LLC the best structure?

Thanks in advance. 

[Bill B.]

Wouldn’t you save time, money and hassle by simply getting an umbrella insurance policy? After all, you are 10x more likely to hurt/kill someone with your car than have a problem with your rental property. Without the umbrella you lose everything including what the llc holds. Especially since there are two of you. How would you feel losing the property because your partner killed someone with their car?

A $3 million policy for 12 rental properties, 2 cars, a pair of personal properties, a boat and a motorcycle was less than $1300 last year.