Putting houses into an LLC

[Katherine Rossell]

Hello,

I need a little advise or feedback about my current situation with my LLC. I currently own two duplex's (one that I live in) and I am in the process of buying a 4 unit with a conventional loan. At the start of this real estate investing journey, I was reading books and took some other coaching courses and seminars for real estate investing. Through those outlets, I thought at the time that I needed to start an LLC. My coaching course provided my information to an affiliate company which conned me into purchasing an LLC through them with the promise of education and hand holding through the process. Needless to say, I ended up setting up my LLC through this company. I then opened up two business accounts at a bank for the LLC. After spending some more time on Bigger Pockets and reading more books, I think that I jumped into getting an LLC to quickly. I don't have a lot of equity in my houses and I don't have any large sums of money or cool stuff that someone could get in a law suite.

Now, I have an LLC that is sitting empty with no houses in it and two bank accounts that are stagnant. Should I put one of my houses into the LLC? Can I use the business bank accounts that I set up in my LLC for the expenses and rental income on the properties even if they are not in the LLC? Would putting one of my houses into an LLC hurt my ability to get another conventional loan for another building?

Any thoughts or shared experiences would be helpful. 

Thanks

[Account Closed]

Look at it this way, Katherine: forget everything you've done up until now including the reasons for doing them. What do you want, right now, today? If it's a house in an LLC well then, you have both, marry them up. A business account? You have that too.

On the other hand, if you just want too keep the houses in your name and simplify your accounts, then close, cancel, or shut down everything and make things the way you want them, today.  Don't worry about sunk costs or any other past choices.  Learn and move on.

That said, I have two rentals with mortgages in my LLC and I keep hoping the mortgage holders don't come knocking with a due-on-sale clause. I didn't know about that little tidbit until after I converted them but if they do come, I'm told I can title them back and should be fine (just wasted time and money).

Also, I have a separate checking, savings, and credit card accounts for my small real estate business and I highly encourage you do the same.  I use the credit card for expenses, in the savings account I keep my renters' deposits and the estimated end-of-year tax payment, and the checking is simply a working account where money comes and goes as required.  In my opinion, it's better to keep all that separate from your normal day-to-day personal living.

Hope that helps.