LLC with a partner using personal financing

[Ben Peret]

I'm buying a duplex out of state with a partner. We're thinking of using one of us to finance the property personally (using an investment property mortgage), and then moving the property into an LLC. Here are some questions I'm running into.

Any good attorneys out there that have these answers and want to help set this up properly for us?

We also have another property that we jointly own, and think it might be worth moving that one into the LLC as well.

Questions:

• This is against terms in many mortgages, but it seems to be low risk of the mortgage company taking action. Thoughts on this?
• Have you all seen commercial lenders that can compete on rates with personal investment rates? We're seeing about 3.5-3.625% on a small duplex (less than 200K). Without good relationships, the commercial rates seem to be much higher.
• How would we manage the liability of mortgage payments? A side-agreement between myself and our LLC?
• We have an LLC in TX already, but the property is in AR. Any issues with cross-state operations? Is it worth setting up a Nevada or Wyoming LLC?
• What are the tax / depreciation consequences of this?
• Will umbrella insurance cover me in the event of an incident if it's in the LLC?