Insuring Rental Properties Deeded into LLC's w/ conventional personal loans attached

[Veronica Solomon]

I have 6 rental properties & have been advised by an attorney group to open 6 separate LLC's . All the deeds will be transferred into the LLC's . This is causing absolute chaos for me now with my insurance company. They are saying these are now business/commercial properties so they need to be insured as such . This means an additional $200 per policy on top of what I already pay . Another issue is these homes have standard 15-30 year loans in my personal name ..... so that is another issue ! I have to insure them as "123 ABC, LLC additionally insured "me"". or EVERY loan company is saying "hey .... the insured does not match our records on your loan ."

I'm feeling seriously frustrated with opening up these LLC's & I have already paid an attorney to get everything ready to record these deeds . This feels like I have been advised to start an avalanche of yearly expenses , additional paperwork etc. ! ( I'm also getting advised to put them in land trusts on top of the LLC's now $$$ to avoid issues with my loan companies & having them in LLC 's

I feel EVERYWHERE you turn you hear never have rentals in your own name put them in an LLC

In retrospect , I am wondering why I would not have been petter off to keep them ALL in my personal name with 1 giant 5 million dollar umbrella policy for liability  ........ This just seems a ridiculous amount of money & a crazy complex amount of paperwork that I have regrettably signed up for ....

Any advice or experience in this area would be extremely helpful !

Thanks!

[V.G Jason]

This post will open a can of worms. You don't need 6 LLCs, you need probably half that. A holding LLC in a protected state and two LLCs--one in the state you operate and one that has title.

All titles go into one LLC, all operations go in the other. It's owned by a parent LLC in a protected state by your living trust. Keeps it way more simplified than an LLC per. You can also get an umbrella for your LLCs if you feel that need.

Before someone comes on here and says they've never heard anyone needing an LLC. It's cause it never gets that far, and it's largely a deterrent. And I am one that can speak on the behalf of being lucky to have one, if not multiple. As I have had first-hand experience, and also know someone enough intimately to where nothing was drawn up against them simply because of the proper structuring.

Before someone says you'll pierce the veil, you will that's why you need to make sure you're well capitalized and keep bookkeeping separate. You need to make sure you have an additional endorsement on your title insurance if you're transferring title, and there are insurance agents in raleigh that'll keep your LLC as the proper name on your insurance because that's how all are mine are in Raleigh and Durham.