Convert Rentals into LLC: Can you help me out...

[William Huston]

Hello All, 

I have been extremely passive investing in real estate over the years turning all the houses i lived in from different duty stations into rentals for the most part. As of last year i was up to 7 rentals, but after some advice from others i sold off the 2 that were still negative cash flow purchased prior to the last housing crash when they finally broke even in value to wash my hands of them. 

My question is this.. I am going through the steps to understand real estate investing better and want to get things heading in the right direction as i start investing in more rentals to grow my portfolio, one recommendation i have read and been told is to put my properties in a LLC and maybe even grab a holding company from Wyoming for protection down the road. My issue is my properties are currently VA military backed loans and after talking to one of the banks who holds mortgage to 2 of the remaining 5, they informed me the value of the loan would be due during transfer, because the LLC is not a military member voiding the backing of the loan if i attempt to do a quick claim deed.

So what is the best route for me to go about fixing this??

3 of the 5 remaining have really nice cashflow, so i want to continue to hold those properties, just sucks they are in 3 different states. 

The last 2 of the 5, they are decent positive cashflow currently with the crazy jump in rental rates, but from 2008-2015 i barely got by with them making less than $40/month in cashflow on them, but they have appreciated a decent amount and would net me about 200-225k in cash if i was to sell them now with the current market values, so i have thought about selling them and purchasing properties closer to my home now, since im no longer in the military moving as much. It would be my very first 1031 exchange, so that would be a journey in itself to learn through... 

I also have about 85k in cash currently that i have been saving up while i searched for another rental local, just not had the best of luck yet grabbing up anything worth investing into, lately houses just been selling for more than asking prices, while im asking below following the principles to get a good deal.