All Forum Posts by: Cosmo DePinto

I heard the rental rate wasn't doing that well in the Huntsville market, do to the new construction. Im in the birmingham market and have been for a while. The rental market here is really good and id love to share more info on that 

Cosmo - I personally don't know Phoenix well, but if I had to do this in another city I would look at income levels, crime levels, and population growth (if you can) by zip code and/or area within a DMA as a starting point. Then, if you can trend over time you'll want to see where the "path of progress" is going/moving and attempt to buy in that path of progress to gain some appreciation in the future. Also, I would look at rental rates to property values to determine if any areas are around the 1% rule. Good Luck!

 I would ask, when you say real estate, specifically what are you trying to accomplish or do?

Yes, you can transfer your properties to an LLC without refinancing, but here's what to keep in mind:

1. 1. Due-on-Sale Clause: Most mortgages have this clause, which could let the lender call the loan due if you transfer the property. Check with your lender first—they may allow it if you personally guarantee the loan.
2. 2. Refinancing: If the lender doesn't approve, refinancing under the LLC might be required, but LLC loans typically come with stricter terms and higher rates.
3. 3. Taxes: Be aware of potential transfer or capital gains taxes, depending on your state.
4. 4. Liability Protection: Transferring to an LLC provides asset protection but may not always be worth the hassle or cost.

Next Steps: Review your loan agreements, consult your lender, and get advice from a real estate attorney and tax pro to ensure everything’s compliant and beneficial.

The unfortunate answer is, "it depends." It will depend on the the circumstances, the loan type, and the entity type. If I remember correctly, there is a provision for properties with Fannie and Freddie loans to be moved to single-member LLCs after 12 months of seasoning if the only member of the LLC is the owner/borrower on the loan.

For govvy loans, the Due on Sale clause will be available to your note holder - having an LLC take title to the deed (most commonly via a quit claim) will expose you to this clause. The note holder can accelerate the loan if the find out about the change in ownership.

Same goes for commercial loans. The note holder will likely have a say. Almost all mortgage loans these days have Due on Sale clauses, so it comes down to A) whether they find out (usually from changes in the insurance policy), and B) whether they choose to call the loan.