I have worked with owners trying to sell or purchase multi-family properties and those types of agreements transfer with the property.

You're basically transferring whatever interest you have in the property to the buyer.

If you want to protect your friend's capital as if it were your own, you'd want to:1) Secure the loan with real estate in the form of a deed of trust or mortgage (depending on the state the property is in)2) Obtain property insurance binder with your lender as an additional insured3) Obtain a lender's title insurance policy protecting them (different than an owner's policy) and transfer all funds through an escrow closer or real estate attorney (depending on the state, the requirements for closing may differ)4) Use a real estate attorney who also practices private lender law in the state the property is located in.

1) make the payment directly from my HELOC account2) transfer the money from HELOC to business checking account, and then make the payment from my business checking account.

Hello everyone, I wanted to get advice on transferring my rental property into an LLC in FL.

1) make the payment directly from my HELOC account2) transfer the money from HELOC to business checking account, and then make the payment from my business checking account.

But admittedly, I haven't been to small claims over a deposit dispute before (well technically I have but that was because a seller didn't transfer deposits upon the sale, which is a different matter).

moving it to an LLC will not do much for you in the way of asset protection OR taxes (double check that with a cpa, everyone's tax picture is different). most people lean towards the LLC thing for legal protection, but a single-member LLC is a thin veil that's easily pierced. you'd be paying LLC fees & paying another LLC tax return prep fee, for what i'd say is nothing. if you do want to transfer the deed to an LLC anyway, you'd do a 'quit claim deed' with a title company or real estate attorney. if the mortgage lender ever says something you'll just give them proof that it's a single-member LLC and the one member is you (the original borrower). 

I consulted with my CPA, who advised that the policy loan should be transferred to my LLC for private lending purposes.

I just got an escrow analysis from a new lender (transferred about a month ago) and there is an escrow shortage.