Transfer LLC... be careful...

[Henner Mohr]

When times were good many newbie investors would buy property from banks promising that the property would be "owner-occupied" meaning the bank would give the new owner a better interest rate since it assumed that person was going to personally live (and take care of) the property.

The big problem here is the bank would have also required that the new owner purchase the property personally rather than through a LLC.

This means the property owner would now be personally liable for the property.

For new investors who find themselves in this position you must be careful about using a Quit Claim Deed to transfer ownership from yourself to an LLC you own. Often banks have due on sale clauses in their paperwork that would be triggered by a transfer of ownership. Doing this might make your entire note due immediately.

[Bill Gulley]

Hi, there is a GREAT MISCONCEPTION of what the due on sale clause is all about. It is for the purpose of interest rate risk of the lender and absolutely not to keep a borrower from transferring his/her interest to themselves where no beneficial interest is transferred to a third disinterest party to the loan.

The thing to woory about is the intent to defraud the lender, forget the due on sale. Good luck, Bill