Philadelphia buy and holds

[Joe Boggin]

I own two properties in Philadelphia and I am considering purchasing my third property. All these properties will be in my name because I do not have an LLC form right now. These properties are in low income areas purchase price under 20 K, rentals possibly 500 per month. I am not flipping them on my and holding or at least I plan to.

if I form an LLC and transfer the property into the name of the LLC I'm going to pay 4% transfer tax on either the assessed market value or the purchase price. If I'm going with the conservative approach and get an LLC for every property, I am looking at three individual LLCs for three properties. For three properties and three transfers I'm looking at several thousand dollars just to change the name and have them legally in a separate entity. That can't be avoided! FML!!! That doesn't even include the cost of setting up the LLCs paying my CPA to handle all the paperwork and paying the title company to draft the deeds. All of those costs really kill my cash flow!!

Considering I have a primary residence I have one vehicle and a wife and a son I'm trying to provide protection in the worst case scenario. I'm well aware I need to shop around umbrella insurance. And what really throws me for a curveball is that I saw some people here giving reviews about insurance providers and some insurance providers will not write an umbrella policy if you have rental properties in the name of an LLC?! Does that sound correct?! If a rental property is in the name of an LLC it will be difficult to obtain an umbrella insurance policy to cover any sort of errors and omissions with your rental properties?! Do you think an LLC is absolutely mandatory if you only plan on owning three properties considering the properties are long-term by and holds in low income areas with cheap renters and possible high turnover rate?!

Thoughts?!