Transferring Property to LLC

[Larry Shaw]

First BP post here, this is a great resource! I currently have an LLC established for non-real estate related side gigs. The operating agreement is such that it can perform anything under the sun that is 'legal' and was reviewed by a lawyer. I'm interested in purchasing my first STR with the 10% investment property loan in my name. My questions are:

1. After the purchase, can I simply keep the mortgage in my name, and place the property title in the LLC?

2. If that is possible, then do I place all of the finances on my LLC's books, or is it better to keep mortgage, title, and books separate from existing LLC?

3. My LLC is in VA and the property of interest is in GA, my lawyer said that this is not an issue, but I want to confirm here that an out of state LLC is not a major issue in Blue Ridge / Smokey Mountain regions.

I understand the concept that you would want to separate assets for legal protection, but I'm not so concerned with the existing assets in the LLC today, and can accept the risk of joining with a single STR property. In short, does a transfer of title to my LLC mean I keep the books on my LLC, or should I not transfer title, and keep all bookkeeping outside of the LLC? Thanks in advance, Larry

[Pete Harper]

Yes to #1. I did the same with my first property. I purchased in my name and transferred to an LLC. Some lenders will trigger due on sale clause with transfer. I did some research and found that you can to the transfer legally with a FannieMae loan. I had to wait for the loan to be transferred to final loan servicing company. I contacted the loan servicing company and told them on my plan to transfer the property title to an LLC. At first they argued until I shared the link from the FannieMae website showing it could be done. I eventually did the transfer after some modifications to the LLC docs. Transfer part was easy. I drew up a title transfer document, signed it and registered with the county for $45. Title and insurance are in the LLC name and funds go into an LLC owned bank account. LLC makes mortgage payments but the loan remains in my name.
I did this for my first property to establish credit but wouldn't do it again.  It was a PIA for paperwork and took about 9 months to finalize.  This strategy doesn't scale well as you will hit your personal loan limit.  My next loans have all been commercial in LLC name.