New Investor in Colorado

[Adam B.]

My wife and I started our property investing last year. We have a single-family home now and we're looking to add two more properties before the year is out. I'd like to buy a duplex and possibly buy some mobile homes. From my understanding there's good money to be made with mobile homes -- at least in terms of cash flow. Right now I own my properties through my VA loan. However, I do have an LLC. What I don't know is how to move my properties into the LLC later. Any ideas or thoughts on how to use the LLC to do this or how best to get smart on mobile home investing?

[Adrian Tilley]

@Adam B. I don't have any experience with mobile homes, but generally with regard to entities/transfers of title, I wrote a blog post about entity protection and some drawbacks here.

Also, you can transfer to an entity any time you want. You can use a warranty deed (the normal deed used for sales), but you could also use a quitclaim deed, which doesn't make any assertions regarding whether title is good, but just gives any interest you may have to the grantee. Generally this should be sufficient for your purposes, but talk to a qualified attorney and account and don't rely on this because it's for informational purposes only and not legal advice. I hate having to say that all the time, but CYA...

There is NOTHING practically or legally preventing you from changing title to a property, even if your lender doesn't want you to, but as @John Fedro said, the lender may have the right pursuant to a due on sale clause to "call the loan", which means you have to pay it off within a specified time or risk the bank foreclosing. As John pointed out, it's rare if the loan is current and being paid regularly, but it is still a risk.

Also, talk to a CPA to see what the best solution is. Instead of transferring title, you can rent the property to the entity, which doesn't transfer title, so the lender shouldn't get upset, but will accomplish many of the same objectives.

Good luck!