Title Transfer to LLC - Avoid Due on Sale Risk

[Jason DeFazio]

Hi All - my business partner and I jointly own a property in the Philadelphia area and we'd like to transfer ownership to our LLC. However, our property is still mortgaged so we want to ensure this doesn't cause any issues, calls on the loan, etc. Does anyone have advice on how to go about this with our mortgage company? We still personally guarantee the loan, and we make all payments on time, so I've read that it may not be an issue, but want to be sure. Also want to get a sense of the steps to be taken i.e. - do you tell the lender ahead of time? Do you just go ahead with the transfer without talking to the lender? The goal of the transfer is simply to limit our liability as we rent the property.

[Marcus Auerbach]

@Jason DeFazio why would you do that in the first place? Try to fully understand your risks and why you think you need an LLC. Talk to your insurance agent about an umbrella policy with $1m coverage and ask what risks are still uninsured and how an LLC would help. You will probably arrive at the same conclusion as anyone else..

Think of an LLC as a firewall, it can contain the fire in one segement of your portfolio and avoid loosing everything. If you have only one property whats the point of the fire wall?

I am not your attorney and this is not legal advice ;-)