New to Air BnB - Cabin, insurance and business structure

[Rasiel Rodriguez]

Hello,

My wife and I are venturing in our first property; a small cabin close to Helen, GA.

We have several rookie questions in regards to how to run this small venture, so I will try to be as concise as possible. 

Business Structure

We want to run the business through an LLC for its benefits.

We are taking a Conventional Loan in my name to pay for the property. We quickly found out that if we put the cabin on the LLC's name, we would be violating the "due on sale" clause and the lender might decide to execute the mortgage or force us to put the title back on our name.

If we cannot put the cabin on the LLC's name, what are the benefits of using the LLC in first place? To interface with Air BnB?

Have anyone been on the same situation before? What is recommended?

Insurance

We need to insure on the LLC's name or in our name - depending on what we decide on the title.

Should I seek products tailored to short-rentals like Foremost or Proper through Lloyd's of London?
What are the recommendations?

Thanks in advance!

[Marcello Di Gerlando]

Im also a rookie in the STR game. But not so much in the REI game in general. My one and only STR came on the market in DEC 2019 and we have $40k in bookings with 50ish days booked in just over 30days live.

Lots of stuff in your post. 

From my experience banks dont often execute due on sale clause. It's a backstop for the worst case scenario. I would not be overly concerned. You should however, reach out to a real estate attorney and pay the $300 for the best approach and piece of mind. You may be better off buying the property in your name and transferring the deed after the sale. I have my STR property in an LLC.

I use Proper insurance. I cant speak to thier credibility and I'm not prepared to vouch for them at this early stage. I did a lot of back and forth due diligence with proper insurance and USAA. BLUF: USAA was simply a rental policy with an addendum. Frankly didn't cover the nuances of STR. Proper was marginally more expensive but covered the business in a more comprehensive way.

[Rasiel Rodriguez]

Thanks Marcello for your feedback; greatly appreciated.

Buying on my name and transferring to an LLC would be my preferred approach, but I have been concerned about the lender executing the "due on sale" clause, and causing more trouble.

I have quotes from Foremost and Proper and they are both tailored to STRs - or at least Proper's is, I need to double check Foremost's.

Thanks again!