Regarding risk my perspective is that it is much lower than typical common equity deals in that there is a 25% cushion re valuation drop before the pref equity holders would be impacted.

When insurance companies face big payouts for natural disasters, it affects the rates of all of their policy holders not just those in the affected areas although high-risk areas are obviously affected more.

For other folks, here are some other entities that would, if you sold the property to, have negative tax consequences: YouYour spouseAny of your lineal ascendants or descendants (parents, children, grandchildren, and the spouses of children, grandchildren, — including legally adopted children)Any investment providers or fiduciaries of the IRAAny entity (like a corporation, LLC, or trust) where a disqualified person owns more than 50%Any entity (like previously listed) where the IRA account-holder is an officer, director, a 10% or more shareholder, or a highly compensated employee

Make sure you are signing well drafted contracts and you are not only collecting insurance certificates but are also being added as a certificate holder before any 3rd party vendor performs services for you.

If I were you I would reach out to the mortgage holder to get permission to transfer the property to the LLC without triggering the clause.

Everything is going well but I got just got a message that we need to do a conference call with this third party verification service and the holders of the 2 existing mortgages we have.

And that note will be the lien against the deed of the house, with your lender listed as first lien holder.

The above is true UNLESS as second lien holder you have an INTER CREDITOR AGREEMENT with the first lien holder.

I also am a college degree holder and I am now 60 years old and I had a real estate broker license for about 30 years but never used that on a full time basis.  

It just boils down to what you are trying to say is debts can be paid off quicker paying in chunks borrowing from a HELOC rather than just taking that same money and just making extra payments to principle to your current mortgage holder.