Costs/benefits using LLC versus personal name

[Keith A.]

I have properties in my personal name with conventional financing. A few of them have conventional mortgages so I am well under my limit. I am in the process of purchasing a 4plex cash and was planning to use an LLC (asset protection) but it doesn't seem to make financial sense to do it as it looks like all of the expenses like liability insurance and refinance loan terms become less favorable. I have a 5M personal umbrella currently. Does it make more sense to continue loading up on the conventional loans while I can making sure I have plenty of insurance coverage until jumping over to the commercial side of things using LLCs?

[Brett Russell]

@Keith A.

I think you're going to find no one size-fits-all answer for your inquiry. There are people on this site who are very in favor of LLCs for entity protection and other who are just as in favor of just getting lots of umbrella coverage. You likely should get advice from your attorney and determine what you are both comfortable with.

Your described situation seems quite reasonable. Your coverage seems pretty good.

In my mind, though, I always consider the worst case. I presume the insurance company is going to find some way out of living up to their obligation and potentially leaving me responsible for a huge judgement. I don't want that coming back to my personal assets, so I'm going to be going the LLC route.

Just my $0.02