So folks, I am going through this attempt to transfer from personal ownership to an LLC now. I have 7 investment properties in my name, and I've called two banks (Fifth Third and Arvest that collectively hold 4 of them. They are both telling me that I have to refinance in order to actually do a successful move to an LLC.
They are both telling me that "per the terms of the note", if title is transferred it is reported and they can require the loan to be "paid in full", and that they WILL require that, thus forcing me to Refinance.
Here's where the BP community could really help. Since I have significant debt tied to these properties, how high is this "refinance risk"? I don't get the LLC protection I need if the properties continue to be held in my name -- but I also incur significant "other" risk if I have to Refinance at a much higher rate.
It seems like I'm "damned if I do, and damned if I don't" -- I either pay an IMMEDIATE cost of higher interest rates on each property via a set of Non-recourse loans -- OR I don't move my homes to an LLC structure and then I risk Negating ANY value from the LLC structure itself.
My impression is that the number of individual investors that truly maintain the LLC structure and format correctly must be small -- because the number of hurdles to correctly maintain the Corporate Veil across bookkeeping, asset ownership, and legal structure are high...