Has Anyone Transferred a Property to an LLC?

be able to "deed" the property to your LLC, I think?

You can do what you want. I have done it several times. Since there are no mortgages involved, in Ohio, we simply prepare the warranty deed, notarize it, take it to the county courthouse and file it for a fee. ($12.00???, I think) There should not be any other transfer taxes as a box can be checked on the filing paper to indicate that no "real" change of ownership is being made. If you are not comfortable with this, go to a title company who can prepare and file for a couple hundred bucks. Hope this helps.

Valerie you can transfer that at the county clerks office. The cost is based on the filling rate that county has. Here it is our tax rate of 8% x sale price you should be able to do $1 plus processing fee.But things are different everywhere.

You can find a warranty deed (or grant deed in CA) online for your state and use it, and notarize it, then record it above just like the guys said. No need for anything else! Its not too hard to do.

I don't know which state you are in, but here in NC we use Quit Claim deeds when there is not sale. A General Warranty deed usually involves paying for tax stamps for the transfer. In any case, the real estate attorney you use should be able to tell you for sure and it shouldn't cost but a couple hundred bucks.

I am not a lawyer nor giving any legal advice. This has been my experience.

Beware of buying real property with these issues-- or falling victim to Title transfers involving deeds and LLC's and other entities.

Many times more than one person has interest in that LLC or entity.
Many times one of those persons decides they have a right to take it away from partners for themselves.

What's left is a clouded title and could diminish the value if any.

If that is the case, at least in Florida (Fl Stat 608.4226)Conflicts of Interests and LLC's and I assume there are statute protections for other types conflict of interest holders, husbands wives, partners etc address the issue.
Finding the actual statute and handing it to your lawyer should facilitate the process.

It basically says if you move ownership away from any multi-member multi person - even just two--- that have or claim ANY interest in the property from 1%- 99%

and

you claim you have an interest and are moving it too any entity that you also have an interest in 1%-99%
That's a conflict of interest and there are laws and guidelines.

Without the other partners, you cannot do it ...you cannot even vote on it, even if you own 99%,
UNLESS
The OTHER person or persons that claim an interest do not have an interest in the other side therefore they are loosing there interest----in that property,
It says, only they can formally vote to do so, and again only they can provide written acknowledged permission AND the they must acknowledged that the transfer is a benefit to them, the company, the partnership and of fair value to all involved.

This prevents partners from proclaiming ownership and or stealing, from .000001% to 99.99999% of another's interest in a property and gifting it to themselves somehow, whether they all agree or not.

So if anyone claims to own an interest in that property via marriage or partnership even if there is a dispute, both must sign, receive a benefit and fair value according to both before withers interest is transferred.

The old 51%-49% voting right doesn't allow majority equity holders to move minority owners interest away from them and to something one of them own even 1% -100%
Check it out. Also look up affidavit of partnership interest and affidavit of interest which can be file if you suspect someone has or may try to cover up your interest and move it away from you or your family.

Hi Valerie. You should be okay with the transfer to your LLC. Just call or go to your court house and ask them what needs to be done. It can be differant for every state and or county.

Steve.

yes, I know you did it with your property, so I will follow your steps...

valerie

Hi, while I'm trying to decide on LLC or S Corp, I found this post.
I have (a maybe dumb) question.
I thought forming an LLC is to protect the personal assets. Among, other things, probably. Why then, would you want to move a free and clear property to your LLC?
Wouldn't that make it vulnerable in case of law suits?

Have a great 4th of July weekend!

It's highly recommended that you move property to an LLC. This will separate the liability between you and the property. It's exactly like not having "all your eggs in one basket" (no LLC). However many "baskets" you have will = the number of LLCs you have +1( this "1" is yourself and everything that you own personally.)

Example #1: You own 10 properties in your name free and clear. It's Fourth of July weekend and you've had too much to drink and you cause an accident. The lawsuit may cause you to have to sell anything you can to fulfill the judgement against you. So in this example, you may lose (have to sell) all 10 properties.

Example #2: You own 10 properties inside a single LLC. You get into that accident again (bad luck). You personally get sued. You again may have to sell everything you own. The LLC still maintains ownership of the properties therefore you still control all of the cashflow that those properties generate without having to sell anything from the LLC.

Example #3: You own 10 properties separated into different LLCs. 4 properties inside LLC A, 6 inside LLC B. Someone slips and falls down the steps in one of the properties held by LLC A. LLC A gets sued. You may have to liquidate everything in LLC A to cover the lawsuit. LLC B was not involved in any way so all of the assets held by LLC B shouldn't be touchable.

There are yearly filing fees with each LLC or Corporation that you form. It will be up to you to decide how much you're willing to risk at one time. Some people may decide that they will have a single LLC per property (expensive in filing fees and probable / possible accounting nightmares, others may decide that they want to have multiple properties in one LLC. 5 properties or net worth of $500k might be all that you'd want to put into a single LLC. Everyone has different levels or comfort levels of risk.

It cost us $42.50 to establish a trust and have our LLC be the beneficiary of that trust.

We did that with our properties in MN - we purchased in our current name and then quit claimed them to our company. We used a title company so the biggest expense was there time, but it was super easy for us and worth the minimum amount of time. You could probably do the same thing right at your county recorders office.

Best of luck!

need to be free & clear to transfer them into an LLC?
Barbara

thanks for the different scenarios..........
I guess I was thinking it's more likely for the LLC to get sued than me personally.
But then you never know.
Appreciate the input.

for expanding on this thread-great information that may be useful to other DG members.
Another thing to keep in mind too is that if the property is under LLC, apparently banks won't refinance that easily; so if you're thinking of refinancing it, you may want to leave title under your name.
On the other hand, if the property is under the LLC, you may be able to get a Line of Credit for your business, which can come in handy when you need the cash. So many things to think about!

Learning and progressing every day!

Valerie

To refinance you would have to put it back in your name until the transaction is done. This is one reason why it's not recommended you use a C-corp, because of tax structure involved. BUT, I digress. I came on this thread to point out that in New York it's required that we use a lawyer for Real Estate transactions. I've been looking to put my investment money to use in New Orleans however where that is not the norm, and it seems to me that using a lawyer is not the norm in other parts of the country.

Because I was forced to used a lawyer on my NY dealings, I accepted it as a necessary cost, and to be honest, I wouldn't feel comfortable now doing a deal without running it by a lawyer to make sure it's in my best interests, and the language makes sense. Anything: leases, offers, contracts, and even questions about how this might affect my estate (hence the LLC, S-corp, question.) A couple hours of a lawyer's time is really not that expensive and the sound sleep you get as a result is WELL worth it!

My humble opinion: Support the economy, spread wealth, and engage your professionals (e.g. accountants, lawyers, bookkeepers, contractors, ect)!

Take care,
Chad.

If you own more then one rental property look into a series LLC. In a series LLC you can set up one LLC and each property is seperated from the other. It is like having an LLC set up for each property without the cost of setting up a new LLC for each property. It is relativly new so it is not in every state, but definately worth looking into.

Valerie, I simply had my attorney set mind up for me. Properties are in two different states so I just put both under the same LLC.

The cost was based on the state filing fee for each state but very reasonable to do.

Attorney filed docs for me for the out of town property and I handled the filing for the property located in the state I'm in.

Rodney

what! please explain a series llc. never heard of this

I did set up my LLC with Legalzoom; then filed a foreign out of State directly with the Secretary of State; I want to refinance my out of state properties, but I also want to transfer properties to LLC; just not sure which one to do first.
Also, Bill Pohl gave me another great piece of advice; instead of filing a foreign LLC; keep every state separately; i.e. file a new LLC with every state.

Kettleman: series LLC allows you to set up one LLC with branches; you put each property you own in its own LLC branch. This keeps each property independent of each other for protection.

Learning and progressing every day,
Valerie

valuni,thanks for the info,

valuni, i see that you setup your llc through legalzoom. but i see so many reviews that say it is a nightmare to do so through this company. any suggestions?

I set up my first LLC with Legalzoom to make sure everything was done right; my husband also used them for his own buisness, and we both found it to be pretty straightforward; you can call them anytime and as many times as you like before and after you open your account- I did, and they were very friendly and not pushy at all (which I liked). You can pay with a credit card, everything is done online, and a couple of weeks later you get your documents in the mail. That's it.

My foreign LLC-I opened directly with the State (since I already had the LLC); just downloaded paperwork they have online, called in to make sure I did things correctly, and mailed with a check. After a week or so, I received the foreign LLC document in the mail.

Hope this helps...

Learning and progressing every day,
Valerie

It is more common to transfer from an individual to an LLC through a Quit Claim Deed. The quit claim deed transfers pretty much just the name. It does not warrant from any title defects the previous owner had. So, it is more common to go with the Quit Claim in your case. Just as a general note, if you have a mortgage on this property and the mortgage is in your name as individual, you may just let the lender know that you plan to transfer the property to your LLC to limit your liability and more protection to you.