Quick Case Study/Questions for First Rental Purchase

[Chris T.]

Hello - Hope everyone is doing well today!  I'm close (30-60 days out) to purchasing my first rental property and would like some perspective on how I should handle financing, llc or not, and a few other items.  I currently have total assets (primary house, investments, etc.) of ~$1M and debt of ~$170k.

The investment property market value is ~100k and purchase price ~ $70k.  The rental will be a buy and hold.

Questions:

1) To LLC the investment property or not? If not how much of an umbrella should I add to my personal insurance?

2) I will need additional cash to purchase the property.  Should I refinance my primary house (value = $400k: $161k balance) and cash out the $70k or go another route?  I can refinance @3.75% with $500 closing.

3) If no LLC, what do others do to separate personal and rental cash flows? Do you have a separate bank account?

4) If I form an LLC and pay cash from my refinance, how do I handle the cash for tracking in the LLC? Do you deposit the check from the bank in the LLC bank account prior to the closing and write a check from that account for the purchase?

Thanks!