Real Estate LLCs

Are you a real estate investor? Did you know that you could protect your personal assets by forming a Limited Liability Company (LLC) through LLC.com and get more for your money? More real estate investors than ever are turning to us to form an LLC. If there is a claim or lawsuit relating to real estate owned by a properly formed and managed LLC, only the assets owned by the LLC are generally at risk. The investor's personal assets should not be subject to the claim or lawsuit.

Why Real Estate Investors Form LLCs

Although both an LLC and a corporation can help protect an investor from liability, we find that most investors choose an LLC to hold their real estate investment because:

• An LLC does not require some of the formalities of a corporation, such as holding annual meetings. 
• LLC operating agreements allow investors to define and limit the rights, powers, and obligations of the managers and members.
• In addition, LLC owners enjoy pass-through taxation at the federal level. Each member reports their share of the profits or losses on their individual's tax return. No separate federal tax is assessed on the entity itself.

Transferring Deeds and Mortgages

To transfer a deed to an LLC, the deed is prepared in the LLC's name and filed and recorded in the appropriate office(s). These offices are located in the jurisdiction in which the property is located (usually the county's recorder of deeds office). There are different types of deeds that may be used to transfer the title to the property. Since LLC.com cannot assist in preparing or filing a deed, we recommend that property owners consult with a lawyer with regard to any transfer of property to ensure that it is done properly.

Individual investors who obtain a mortgage for property in their own name and then need to transfer the loan and mortgage to an LLC will need to negotiate the transfer, if possible, with their lender. Whether the lender will agree to allow the LLC to replace the individual investor as the borrower on the loan and mortgage will depend on the particular circumstances presented. There may be costs and tax issues relating to such a real estate transfer, as well as changes to existing loans and mortgages. It is prudent to obtain advice from a real estate attorney, since LLC.com does not assist in obtaining or transferring a mortgage.

Form an LLC now or contact an LLC Business Specialist at 877-261-9606 (toll-free) or 302-636-5457.