California: How to convert rentals from Personal name to LLC

[Milin Parekh]

I have 2 rentals in California: one Single family and one triplex both in California. both properties are under my personal name. I am trying to learn different asset protection strategies using LLC. and Land trust. Any suggestions.

I have following questions:

1. 1) California: How to convert rentals from Personal name to LLC or Land Trust ?
      1.a) Deed: Should I use Quit Claim Deed or Warranty Claim Deed to convert rentals from personal name to LLC or Land trust?
2.    1.b) Do Deed has to be notarized? 
3.    1.c) Do Deed has to be registered with County as well?
4.    1.d) Bank Account:I guess I will have to open separate bank accounts for each rentals whether its LLC or Land Trust?
5.    1.e) LENDER: How to take care of Lender? Do I have to Inform Lender? Please guide me Process?
6.    1.f) INSURANCE: Do I have to change Insurance? The moment I change Insurance , Lender will come to know automatically.
7.    1.g) LEASE: DO I have to change rental agreement using addendum or change entire rental agreement? 
8.    1.h) LLC Vs Land Trust: Should I open LLC or Land Trust for each rental?
9. 1.i) Do you use any websites to download Deed or create LLC or Land Trust? Any Suggestions?
10.            1.i.a) www.uslegal.com
11.            1.i.b) www.rocketlawyer.com 
12.            1.i.c) www.landlordology.com
13. 2) Asset Protection Strategy for rentals: 
14. 2.a) Do you think creating 2 different LLC's for each property and then cover as part of Wyoming Land trust.
15.          Or 
16.    2.b) Create Land trust for each rental and open another Main Land trust in Wyoming and house 2 rental land trusts within it.?
17. 2.c) What are the best name strategies for Anonymity while creating Land trust or LLC? 
    

• Thanks,
• Milin

[David M.]

@Milin Parekh

I think you need to talk to some professionals about this and/or do some more research.

We've many discussion in threads in BP regarding moving personal property into a LLC. I think its messy. With some advice on BP, there appears to be a way to do it, but I think it leaves the LLC as an "alter ego" thus piercing your corporate veil. Unless you also refinance, you will have the mortgage in your personal name and Title in the LLC. You should be able to create a legal relationship between the two so that just the LLC is paying for everything. But, I personally figure you do this enough times and the LLC is an alter-ego. Low probability / high severity if you trigger the Due on Sale clause with your mortgage since you transferred Title. You need to make sure your Title Insurance Policy is fine with the change in Title and also your Homeowner's Policy is also updated because of the change in Title otherwise there is no insurable interest (I think that's the technical term.

If you don't know how to do a transaction in your State, you really need to talk to local professionals.

For sure, each LLC will need a bank account. Co-mingling funds and payments is sure way to pierce your corporate veil. Trusts shouldn't need accounts.

I thought WY formed LLC gives you anonymity... Keep that at the top. Did realize Trusts were formed by State...

Quite honestly, I'm part of the group that says you don't need to form LLC's for a couple (or even more) rentals. Besides, California charges some $800 per LLC regardless if its in-State or out of State. the costs keep adding up.

I believe Land Trusts are only for anonymity, not asset protection.

That's the really short of it.  Highly recommend that you get much smarter and do more research into each one of your lines in depth.  Just my layman's two cents.  Good luck.