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re: Rental property:LLC or not?
Posted on 8/1/13 at 9:01 am to Poodlebrain
Posted on 8/1/13 at 9:01 am to Poodlebrain
I mean... no two situations, LLC's, judges, venue's, claimants are the same so I don’t really see how that helps.
If i have that 4 plex i referenced above that i have very little equity into plus a bank account with lets say 20k of your
and one of my tenants slips on the front step and busts their head open and is in the millions on medical bills that my llc is being sued for, what good is 300K liability and a "corporate veil" going to do? If you own a rental property there is SOMETHING wrong with it. Maybe my railing on the step was an inch low, or it was a slippery surface. The liability carrier will defend me but will likely be let out of the suit after tendering limits. do you think the plaintiff attorney is going to just walk away?
I highly doubt it. They are going to walk right through that llc and come for my personal assets.
I would sleep a HELL of a lot better buying a 1-5 million umbrella and building part of it into my rent. But that’s just me.
llc vs no llc is all about what risk you are comfortable taking.
If i have that 4 plex i referenced above that i have very little equity into plus a bank account with lets say 20k of your
quote:
Capital must be adequate for anticipated business expenses
and one of my tenants slips on the front step and busts their head open and is in the millions on medical bills that my llc is being sued for, what good is 300K liability and a "corporate veil" going to do? If you own a rental property there is SOMETHING wrong with it. Maybe my railing on the step was an inch low, or it was a slippery surface. The liability carrier will defend me but will likely be let out of the suit after tendering limits. do you think the plaintiff attorney is going to just walk away?
I highly doubt it. They are going to walk right through that llc and come for my personal assets.
I would sleep a HELL of a lot better buying a 1-5 million umbrella and building part of it into my rent. But that’s just me.
llc vs no llc is all about what risk you are comfortable taking.
1
Posted on 8/1/13 at 10:49 am to Mr.Perfect
Every instance I've been able to find in which an LLC failed to provide protection involved commingling of funds, failure to maintain separate accounting records and failure to follow proper administrative procedures in addition to undercapitalization. It requires more than just undercapitalization for the LLC to be considered an alter ego.
Purchasing a large umbrella policy as an individual is always a good idea if you have substantial assets you wish to protect. However, it should be your second line of defense instead of first.
Purchasing a large umbrella policy as an individual is always a good idea if you have substantial assets you wish to protect. However, it should be your second line of defense instead of first.
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