Rental Property switch from personal to an LLC

[Joshua Pavon]

Hi, 

My name is Joshua Pavon. I have 2 questions. 

Question #1: I currently own a rental property that is under my personal name but would like to switch it under an LLC without losing the 2.8% rate that I currently have on the home.

Question #2: If I wanted to do a HELOC on this rental property I have, how would you recommend I go about doing that? Would you wait until the home is under an LLC or would you do it before I switch it from my personal name to the LLC?

Thank you so much for your help. 

JP

[Jason Maguire]

Hi Josh,

You would need to "quit claim" the deed- this would transfer the property from your personal name, into an LLC. There is generally a "due on sale clause" rule in which could trigger from the lender, causing the whole dollar amount of the loan to be due. That being said, I've know multiple persons who have quit claimed their deed and have never had any issues.

I'm not sure on question 2, but i don't think you would need to wait to get a HELOC- deed & mortgage are completely different items so i don't see how the name on the deed would effect the HELOC, but it may be best to wait if the quit claim is already in process.

All of this may vary lender to lender, state to state so that is just my input. Good luck!