Today we are talking about How to Transferring Real Estate to an LLC Without Any Fear. You’ve established a limited liability company for your investment real estate.
Well, the next thing is you have to actually transfer the property into that limited liability company to obtain the asset protection.
Now if the properties paid off you can transfer the property directly into the LLC without any fear of the bank accelerating that down’s or accelerating your mortgage.
But if you have a mortgage on the property. I wouldn’t risk Transferring Real Estate to an LLC.
What I would do is set up a land trust
And then deed your property into the Land Trust. Most likely when you came to one of our events or talked to one of our attorneys regarding the process of setting up the LLC.
“That inputting property into a limited liability company you should first set up a land trust deed your property into the Land Trust you would be the beneficiary of that Land Trust and then assign the interest over.”
Trustor Directly into the name of the LLC
But the point of this instructional article is to talk to you about the deed process that is recording the deed into the name of the trustor directly into the name of the LLC.
The first thing you should do whenever you’re transferring property call the county recorders office. That is contacted by the county in which the property is located.
Many counties have very stringent requirements when it comes to recording a deed. That is they have margin requirements that if you do not properly follow them.
Land Trust or an LLC
They will reject the recording and you may not find out about this for months because they’re so backlogged and actually recording the documents themselves.
So you think you’re protected and you’re really not because you didn’t set it up properly.
Other things that you may run into when recording a deed into a Land Trust or an LLC. Is that there are ancillary forms that must be submitted along with that deed that deal with transfer taxes.
Typically when you’re transferring property into a limited liability company into a revocable trust. Those are exempt transfers and there are specific codes that you must list on any type of transfer tax form to ensure that the property is not reassessed.
Transferring property into a Land Trust or to an LLC
If you’re transferring property into a Land Trust or to an LLC and you’re looking for anonymity. That is you don’t want somebody to know that you’re now the owner or still the owner of that property.
One mistake that a lot of people is that when they’re deeding the property into their land trusts or their LLC.
They put on the transfer tax form that, they want all tax statements sent to their personal address to their personal name.
Well, that kind of defeats the anonymity there that if you’re having all the tax statements sent to your personal name at your personal address.
Then even though your name’s not on the title I will still be able to trace it back to you.
So if you want some anonymity you may consider usually having those tax statements sent to somebody else. If you’re we set up a Nevada LLC for you you can have them sent to our boss office and then we’ll forward them on to you.
That’s just a little area that you may want to consider when transferring property and using another address for your tax statements.
The Right Type of Deed
But in recording the deed itself make sure you understand what the margin requirements are and then when you prepare your deed make sure you’re preparing the right type of deed most people assume that all they do is file a quick claim deed.
But that’s not necessarily the case in some counties or some states such as California. Where you’re gonna use a grant deed you’re not gonna file a quitclaim deed.
Some states you require that you file a warranty deed instead. So be aware of the proper deed form for your particular state and/or your county when you’re transferring property into your entity.