Transferring soon-to-be rental from personal to LLC?

[Rollin Buffington]

Hi all.

Myself, significant other, and my close friend/business partner have been renovating his personal residence for the past few months with the intention of renting it soon. The title and loan is obviously in his name currently but we agreed to fund renovations (and yes, we created a written agreement for this) and then share in the rental income profits. The place looks great and everything is good to go.

We are considering transferring it into our VA based LLC - of which we are all equal partners. Should we simply transfer the title (or deed?) and keep the loan in his personal name as some do? Is this a good idea? We want to ensure, from a business perspective, we are all properly sharing in revenue. We are not sure the implications of using an LLC business bank account to receive rental income if the house is still in his name personally. We would use the income to fund additional rental property purchases. Thoughts?

- we have a separate business bank account that we could receive payments from

- we have tracked all renovation costs and expenses, though they were done personally and not through the business

[Charles Carillo]

@Rollin Buffington

You will want to speak to an accountant since, if the current owner of the property and the owners of the LLC are different, taxes might be owed when the property is transferred/sold to the LLC