Asset protection question

[Frank Boet]

Hello friends. I bought a rental condo in Miami three years ago, under my name, with our HELOC. The rent is paid and deposited to a second personal bank account strictly for the rental. So the condo is paid in full, but we now have a second mortgage on our home for $94k. How can I protect my assets against lawsuits? Is it as simple as opening an LLC or Corporation and doing a Quit Claim to the entity? I can't afford liability insurance because my cash flow is razor thin. However, when the lease renews in February I'm going to require the tenant to get renter's insurance. Thank you in advance.

[Clifford Paul]

Originally posted by @Jay Hinrichs:

Originally posted by @Clifford Paul:

Get a million dollar umbrella policy for a couple hundred dollars a year. Just make sure it covers your rental property. When you get to 5 rentals increase your coverage. LLC are all the rage on bigger pockets but in most cases are just a big hassle. If you are sued your LLC and each party to the LLC will be sued individually. This is not popular thinking on bigger pockets but there's a bunch of attorneys selling asset protection on this site.

i have had exactly two threaten to sue me over 45 years and hundreds of properties we own probably more like thousands of properties and 500 rentals.. when that happens I just send it to my insurance and never hear from it again.. tenants by and large are not that litigious they have no money.. and unless you have some REAL liability no attorney is going to take it on retainer .. so it usually ends there.. and when I do get letters .. I don't respond. unless they actually sue me.. then I send that in. To have one condo.. everyone is selling their services from IRA companies to lawyers to flippers and contractors etc.. so you have to look at all these things.. Asset protection when you have massive assets I can see.. and its expensive.. and it should be. Most of the very wealthy that I know those with 20 to 100 mil net worths they use trusts.. And their money managers set them all up for them..

Right on Jay! In 36 years I only have had one person threatening to sue me. My property manager shut the tenant down immediately.  Never heard a peep after that.  

When I get to 10 million I'll probably start using trust but I'm a few years away from there.  I live my life without fear, getting blown up in Iraq and cancer taught me to not sweat the small stuff because it's all small stuff.  

I know if I lost it all tomorrow I'll just get up the next day and build another portfolio.