Residential Mortgage with LLC Ownership

[Robert Leonard]

Hi everyone,

My team and I are purchasing a 3-unit multifamily rental property using a conventional residential 30-year mortgage, but we want the property to be owned by our LLC, not in our personal names. I've called dozens of lenders and they all say that the mortgage must be in our personal names, then we can have an attorney transfer the deed/ownership to the LLC after closing.

Does anyone have any experience doing this? What have you done to protect yourself personally for the period of time between the LLC being on the deed, and you owning it personally? For example, if we purchase the property in our names and rent it out immediately, we may have 1-2 months where the title is in our name prior to it being recorded in the LLC's name. What have you done to protect yourself during that period of time? Obtain a personal liability policy to cover just a few months?

We want to make sure we are personally protected for the short period of time in which the deed is in our personal names.

Thanks for the information.

Robert Leonard

[James Wise]

Originally posted by @Robert Leonard:

Hi everyone,

My team and I are purchasing a 3-unit multifamily rental property using a conventional residential 30-year mortgage, but we want the property to be owned by our LLC, not in our personal names. I've called dozens of lenders and they all say that the mortgage must be in our personal names, then we can have an attorney transfer the deed/ownership to the LLC after closing.

Does anyone have any experience doing this? What have you done to protect yourself personally for the period of time between the LLC being on the deed, and you owning it personally? For example, if we purchase the property in our names and rent it out immediately, we may have 1-2 months where the title is in our name prior to it being recorded in the LLC's name. What have you done to protect yourself during that period of time? Obtain a personal liability policy to cover just a few months?

We want to make sure we are personally protected for the short period of time in which the deed is in our personal names.

Thanks for the information.

Robert Leonard

You are worrying to much about the risk of owning it in your own names. The additional risks between owning it in your own name vs owning it in an LLC are very much overblown. Get a good insurance policy with at least $300k in liability insurance & make sure you aren't negligent at the property. No outstanding building code violations & unlicensed handymen installing furnaces etc.....One thing you aren't factoring in here is the due on sale clause that's in your mortgage. If you do quit claim it over to the LLC you run the risk of the mortgage company calling the entire note due immediately.