Entity? Needed or not

[Justin B.]

So I posted another topic on BP about how many SFR's in a LLC was too many. I was taken aback a little bit when the first 2 replies were that I didn't even need an LLC, just a good umbrella policy. I replied back and said I didn't want the post to turn into a "should I have an entity" or not post. Then I started thinking,. I am very curious as to the school of though behind NOT having an entity, so here is that post :)

My understanding is that owning investment property in an entity (any entity, not just an LLC) is the only way to protect your personal assets from a lawsuit involving one of your properties. Even if I have large umbrella policy, if the amount exceeds my policy, without an entity, I'm personally liable for any amount over the policy right?. Also, what if the insurance company denies a claim, then what? AND, how much would that level of insurance cost? An LLC currently runs me ~$300/year. Wouldn't a large enough umbrella policy run at least that? So why do that instead of an LLC? and about a million other questions :)

Also, I will mention that my investment company does involve 3 people (myself, brother, and father), not just me, so maybe that factors in?

I assume this post may get a wide variety of responses but I'm here to learn whatever I can, so......GO! :)