LLC or Blanket Insurance Policy?

[Megan Davis]

Hello Everyone! I'm currently looking for advice on what route to take as far as financing rental properties through my LLC will be. Is the LLC better than an insurance policy for personal asset protection? The problem is the amount of upfront money required when purchasing a rental through a commercial loan. I want to house my investments in the LLC, however the cost to do so seems high right out of the gate. I'm currently closing on a property that's $61,500. The lenders want 20-25% down plus closing costs. Then add renovations on top of that and we're looking at 30-40k out of pocket on a $61,000 dollar house. Any advice would be much appreciated.

[Jason Bott]

@Megan Davis one is not better than the other, but rather to have both of them work together to best protect your investment.

Most investors who will be financing in their personal name will just buy higher liability limits with an Umbrella policy. 

Start with $1M General Liability and buy and additional $1M-$5M umbrella coverage until you feel comfortable.

If this is a single family rental, $1M is what most investors will carry.