LLC piercing corporate veil

[Ross Kane]

Hi guys

I am planning to buy my first property soon. I am thinking a duplex. Maybe with tenants already in place. I am feeling overwhelmed and have many questions. But at this point I am going to reduce it to 2 questions so I don't give you a headache. 

1) if a property is being sold as is, is that an automatic disqualification? I am thinking why would a seller sell as is when he can sell normal and get a higher price? how much less should a property be sold because of as is disclosure? 20% less? Right now I am looking at a condo that's in foreclosure and as is, the price is a little too good to be true.

2) I am in California, an anti-landlord anti-business state. I don't know how to be a landlord and protect myself against crazy tenants. I've been reading about LLC protections and many sources that seem to be reliable say that a single member LLC is useless and judges pierce the corporate veil on these all the time. The judge will say this LLC is a sham and you and the LLC are the same. should I have a fake partner (not that the partner doesn't exist, but he contributes $1 to purchase the property) so that it's not a single member LLC? some people are saying save your $800 and buy umbrella insurance. But umbrella insurance doesn't protect against many things like mold. I don't know what to do to best protect myself, and one problem is I also don't know how likely these events are. Like are we talking about winning the lottery or landlords get sued for mold all the time? Another advice I have been given is "just be a good landlord" but that doesn't protect me against crazy tenants and ambulance chasing lawyers who would be happy to destroy my life.

[Jay Hinrichs]

Quote from @Gino Barbaro:

@Ross Kane

Why would a seller sell when he can get a normal price? In this part of the cycle, as prices are dropping and it's harder to get financing, a motivated seller is not going to get top dollar, and most want to get rid of their headache.

Two years ago, it would have been easier, but not now. As far as the legal question, schedule a call with an entity attorney and ask them the proper structure to protect yourself. The fake partner will definitely get you into trouble.

If you're in business for yourself, then you will most likely get sued. That's why you do need proper insurance, along with asset protection.

Gino

end of the day in a law suit everyone gets named  LLC and all the managers.. Just look at some of the high profile cases on BP right now with the syndicators having issue.. I guarantee if there is litigation the Sponsor is going to get named personally.  Then you spend a whole lot of money on orders of limiting but who knows if you succeed..  Also for someone buying one house this is just over kill..  Buy quality home or property maintain it correctly treat your tenants by the laws of the jurisdiction and have decent insurance..