All Forum Posts by: Ying Tang

Hey everyone,

I’m trying to figure out the best way to hold a portfolio of 5–10 rental properties (not quite there yet, but that's the plan). I’m debating whether to keep them in my personal name or transfer them into an LLC. Here are the specific concerns I have:

1. Holding Structure:

How do you all hold your properties? Do you keep them personally or under an LLC? What factors influenced your decision?

2. Refinancing & Due on Sale Risk:

I’m considering refinancing my properties to get the benefits of an LLC (liability protection, easier transfers, etc.), but I’m worried about triggering the due on sale clause. Has anyone refinanced into an LLC? How likely is it to actually trigger due on sale issues in your experience?

3. DSCR Financing Trade-Offs:

If I refinance using a DSCR-based loan (which I understand often carries a higher rate), has anyone experienced significantly higher rates after moving properties into an LLC? How do you weigh that cost against the benefits of LLC ownership?

4. Insurance Costs:

The insurance premiums for my rental properties are already high (I received a quote of around $2,500 annually for a duplex valued at roughly $430k – almost double what the seller originally paid). If the properties are owned by an LLC, do insurers like State Farm still cover them, or do I need to look for a specific commercial landlord policy? Are premiums typically higher for LLC-owned properties?

I’d love to hear your personal experiences and any advice you have on structuring your portfolio for refinancing and insurance efficiency. Thanks in advance for your insights!

It sounds that you are talking about 1031 exchange. Based on what I have learned, 1031 exchange will not apply here. 
The property need to be an investment, while for fix and flips the property is considered an inventory not investment, which you have no intention of holding for an extended period.

Secondly, it might also not be able to meet the timeline requirement of 1031 exchange, where you need to identify the property of interest in writing in 45 days and get it within 180 days after you sell previous one.

@Drew Sygit Thanks Drew! The setting is otherwise great. I looked up reports, the rental demand is strong. It shares boundary with a large park (didn't see any visitors except for one person walking dog). Price is good in terms of cash flow in today's market and mortgage rates.

@David Dachtera Thanks for the insights! Oh..smells like BBQ.. 

@Andrew Street Thanks Andrew! I asked a property management company to see if they think it's a problem to rent. He said "not a big deal. Just give them some sage to burn".

@Kate Sanchez Yeah it seems to have decent amount of appreciation

@Ruth B.  Thanks Ruth! It's a duplex in a high density area. I think maybe it matters more for SFHs or high end communities more than a high density neighborhood?

@Bruce Lynn Thanks for the comment Bruce! I know I would be concerned with unnatural death, but death by aging would be acceptable.

I think you should go after both of them. They should have some insurance to cover them when incidences like this happen. And you need another lawyer probably.

@Elvin Torres Thanks Elvin! It has good tenants who has been there for 7-8 years. I looked up the report and the rent demand seems to be good as well. I plan to vacate the property , do some renovations, and the new rent would go up 25% (already got a property management company committed on that 25% increase). The numbers look overall pretty good and I will try to get a reduced price after inspection.