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Thread: How to Transfer Property to LLC with a mortgage

  1. #1
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    Default How to Transfer Property to LLC with a mortgage

    Hi All,

    I have a 4Plex under my personal name with a mortgage on that property
    under my personal name. Recently created an LLC to help protect assets
    ans so forth. I would like to transfer title of the 4Plex to the LLC.
    I beleive I can do that on my own with a Quit Claim Deed or Warranty
    Deed transfer to the LLC with the help of a title company and
    submitting the right paperwork with the county office.

    However, what do to with the personal mortgage on the 4PLex. How do I
    go about transferring that to the LLC? Is it wise to do that? Will
    the mortgage servicing company allow that and keep the same terms?

    I am in texas just in case that helps out.


    Thanks for your advice.

    Regards

    Mike


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    Default How to Transfer Property to LLC with a mortgage


    <[email protected]> wrote in message
    news:[email protected]
    Hi All, I have a 4Plex under my personal name with a mortgage on that property under my personal name. Recently created an LLC to help protect assets ans so forth. I would like to transfer title of the 4Plex to the LLC. I beleive I can do that on my own with a Quit Claim Deed or Warranty

    Your loan documents should include an alienation clause which means that
    upon change of ownership, the whole loan balance becomes due immediately.
    You need to check your loan documents.

    http://www.AmericanWest.biz

    Deed transfer to the LLC with the help of a title company and submitting the right paperwork with the county office. However, what do to with the personal mortgage on the 4PLex. How do I go about transferring that to the LLC? Is it wise to do that? Will the mortgage servicing company allow that and keep the same terms? I am in texas just in case that helps out. Thanks for your advice. Regards Mike

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    Default Transferring deed to LLC

    Hi, I formed an LLc and would like to transfer a property that is in my name with no mortgage. How do I go about that? Do I need to recruit a professional? I have a copy of the deed quit-claiming it to me.

    Thanks.

    PeggyB

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    Quote Originally Posted by Peggyb
    Hi, I formed an LLc and would like to transfer a property that is in my name with no mortgage. How do I go about that? Do I need to recruit a professional? I have a copy of the deed quit-claiming it to me.

    Thanks.

    PeggyB

    Peggy,

    I have the same exact question. Please let us know if you got any answer... My question is slightly different in that when I tried to quit claim the property to LLC they said I had to pay taxes.

  5. #5
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    Default Transferring rental to LLC

    Hi, Mike,

    I saw that someone said your mortgage company might object and make you pay the balance in full if you tried to transfer a property to your LLC. I don't know why they would object when it protects your financial assets. One of my brothers said that he was told that before he bought a place, but they changed their minds after he had the mortgage and let him transfer it to the LLC. My bank seems to object also, but the property I was asking about was one that doesn't have a mortgage. What sort of taxes do you have to pay if you quit claim a property from yourself to an LLC? I just wondered as my son just quit claimed a property to me.

    I'm in Ohio. If I hear anything, and I expect the lawyer here will tell me, i'll let you know.

    Luck to you!!

  6. #6
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    Default transfer to LLC

    Peggy,

    No NO... I hope every doesn't misunderstand me.

    I ALSO Have NO Mortgage. I just want to transfer property to an LLC so that I have protection, etc. etc. But when I went into the city office, they said I had to pay taxes because I was transfering to LLC... I asked, why is that I can transfer property to another individual without paying taxes. They just said it's not the same...

    I'm in FL. I will also let you know if I hear anything... I'm thinking I might have to find out from and CPA.

    Thanks,
    Mike.

  7. #7
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    To transfer property into your LLC wheather there is a mortgage or it is free and clear, in Georgia, you complete a "Warranty Deed" and file it at the county courthouse where the property is located.

    In Georgia we also have to complete a PT-61 form, online.

    So you may have other documents that need to be filed.

    It's no biggie, check with an attorney.

  8. #8
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    We seem to have several questions on one thread, but I'll take a stab here:

    Guest wrote:

    However, what do to with the personal mortgage on the 4PLex. How do I go about transferring that to the LLC? Is it wise to do that? Will the mortgage servicing company allow that and keep the same terms?
    Mike, it is very unlikely that the mortgage lender will let you transfer the mortgage to the LLC. The lender made the loan to you and you are liable for the deficiency if there ever is one. If there is no acceleration of the mortgage, the LLC will take the property subject to the mortgage.

    mikegyver wrote:

    My question is slightly different in that when I tried to quit claim the property to LLC they said I had to pay taxes.
    They were probably referring to transfer taxes. Many jurisdictions have imposed transfer taxes (or stamp taxes) based on the value of real estate transferred. In some places, tranfers to a wholly owned entity are exempt from the tax. In other places, you are going to have to pay the transfer tax just as if you sold the property to a third party. Check your local law.
    David K. Staub (www.illinoisbusinessattorney.com)
    Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

  9. #9
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    You won't be transfering the mortgage.

    They will still have a lein on the property.

    The loan is still in your name and on that property, and you are responsible for it.

    It's a legitimate, form of protection. ESPECIALLY on rental property.

    I've done it five times on my home and on rental property.

    Take posession in my name and immediately after the mortgage company files their lein, I file my LLC "Warranty Deed". I've done it on my own residence.

    Didn't need to ask anyone for permission.

    If you are going to refinance you may need to move it back into your name, but as soon as their lein is filed, back into the LLC it goes.

    In most States there are no transfer taxes, unless there is a sale.

    I do have to pay a $20 filing fee at the courthouse

    You won't Quit Claim. You will do a Warranty Deed.

    In Georgia, just for transfer, there are NO taxes.

    And by the way, there is no need for the LLC to take out another title insurance policy, provided you had one to start with.
    Last edited by ncso911; 10-23-2006 at 07:53 PM.

  10. #10
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    Default Transferring to LLC

    The mortgage holder won't give a ****.

    They will still have a lein on the property.

    The loan is still in your name and on that property, and you are responsible for it.

    It's a legitimate, form of protection. ESPECIALLY on rental property.

    This is great to know. My brother said the same--that the bank said no until the mortgage was official, then had no objection. So I will transfer. The LLC protects their investment as well as mine, so it just didn't make sense that they would care.

    Thanks, thanks. Peggy B

    __________________________

    I've done it five times on my home and on rental property.

    Take posession in my name and immediately after the mortgage company files their lein, I file my LLC "Warranty Deed". I've done it on my own residence.

    Didn't need to ask anyone for permission.

    If you are going to refinance you may need to move it back into your name, but as soon as their lein is filed, back into the LLC it goes.

    In most States there are no transfer taxes, unless there is a sale.

    I do have to pay a $20 filing fee at the courthouse

  11. #11
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    Default Transfer Deed & Mortgage into LLC

    I currently have a duplex that I use as a rental property. It is purchased under my name and financed under my name.

    I would like to place the property under an LLC name I recently created... How do I do this?

    I would also like to transfer the financing under the LLC so that it is not on my debt-to-income ratio... How do I do this? or How do I ensure this for the next purchase?

    Thanks,
    Allen

  12. #12
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    First, make sure that the transfer doesn't accelerate your mortgage loan. If it doesn't, you just sign a deed to the LLC.

    As for getting the financing off your debt:income ratio, that is probably impossible. You borrowed the money. Transferring title of the real property which is subject to the mortgage in no way relieves you of your obligation. If that is what you want, you'll need to refinance with the LLC as the borrower and have no personal obligation. Unless the loan to value ratio is very low, getting a loan on a small building with no personal liability is really tough to do.

    Also, in some places, real estate transfer taxes are payable even on a transfer to your own single member LLC. Be sure to check and know what you are getting into before you start.

    Good luck.
    David K. Staub (www.illinoisbusinessattorney.com)
    Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

  13. #13
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    I think what you described is what I was thinking about trying to do. I was looking at refinancing the property into a FRM and at that time wanted to put it under the LLC name. What all do I need as far as the LLC is concerned to be sure that I will have no problems taking out a loan under the LLC name for the refinance?

    Thanks!

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