This is a common question in Robert Kiyosaki's RichDad forum. In Robert Kiyosaki's book Rich Dad Poor Dad Kiyosaki recommends building wealth by investing in rental properties under a limited liability corporation. The confusing thing about this to newbie investors is that a bank typically will not grant a mortgage to a buyer under an LLC.
The way around this is to do what is called a Quit Claim deed after you by the property. By doing this, an investor deeds the property purchased into their corporation while the mortgage loan remains in their personal name. Beginner investors get confused because the bank usually has a clause in the mortgage where they can call the mortgage if title is transferred. A good real estate attorney will explain that although this clause exists, the mortgagor is unlikely to find out about the transfer if the payments are made, and real estate investors do this all the time with their investment property.
The important thing to remember is that when you buy investment property and deed it into an LLC, you are transfer your rights to the property over to the corporation to limit your liability to lawsuits, but you will remain responsible for the mortgage as a personal guarantor. It may feel uncomfortable at first, but the truth is that it is a standard business procedure. On one hand, if you don't deed the property into a corporation, everything you have is on the line. On the other hand, if you follow through with the quit claim deed, the bank may find out and call the loan.
How to Buy Investment Property Under an LLCConsult an attorney who specializes in investment property for all possible outcomes. Also, consider joining a real estate investment club and interview seasoned investors about this topic.
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