All Forum Posts by: Garrett Canter

@Account Closed, Thanks for the recommendation. Ill check it out. Any specific addage about what an umbrella policy provides over just increasing the liability insurance on each property?

@Polly Stankuviene Who are the best registered agents in a state you don't operate in?

@Account Closed Thanks for the input. As I understand it you mentioned 2 types of insurance. Liability insurance and umbrella policy insurance. As of right now my properties have rental property insurance that is specified to cover an LLC own property. The liability portion of that insurance is $300K. Sounds like you recommend $1M? Also, does an umbrella policy cover multiple units or just one requiring multiple policies?

@Jerry W.  You make a lot of great points but seems to argue for and against each point. I am probably miss understanding you. 

I want to maximize liability protection while reducing all the multiple filings. Based on the discussions so far and the relatively small portfolio (5 properties). It sounds like the best option is to have one LLC holding all 5 entities. Each entity currently has a LTV ratio 80%, or more, providing additional protection by being poor targets for legal action. The insurance will be LLC owned rental property insurance. Although It sounds like this scenario does make me a little vulnerable, since there will be access to several of my properties, it reduces the paperwork and still separates the business from my personal investments. Once each of the properties gets larger, 1031 exchange and flip up to multi-family, then the value of each property would make it worthwhile to get an umbrella policy and/or separate LLCs for each property.

@Polly Stankuviene , To make sure I understand you, you're saying that the best way to create a lead to Nevada/Wyoming is to have a property there that is the parent LLC?

@Natalie Kolodij , It sounds like Series LLCs are great ideas and hopefully the way things go but just not enough momentum has caught on to make them viable options. I like @Saran Mandhadapu  idea but sounds like it still would create multiple 1065/K1s during tax time.

@Polly Stankuviene

Most LLCs seem to require an address in the state to open, is it possible to open a Nevada (heard Wyoming was good too) LLC without having property or living there?

@Cameron 

@Cameron Skinner 

To make sure I understand you correctly. Liability Insurnace (Umbrella policy?), in a way, might encourage lawsuit since the lawyer knows they will get payout? Makes sense that mortgages helps limit liability as well.

So moving forward, sounds like I need to just put all 4 properties under one LLC and have insurance that covers a property in an LLC name? And yes all my properties are 20% down convention loans that I have only recently purchased, LTV 80%.

@Dave Holland

Your post makes a ton of sense. Depending on how much each property is worth with respect to each other as well as how much your properties are worth vs how much you are worth will determine your structure. 

Assuming all 4 of the properties were worth $1M each then maybe keeping them in a seperate LLC each makes sense. . However, mine are not worth that much so providing so much asset protection is not worth it.

@Dave Holland

I hear you about the insurance its just odd because there is so much discussion about how the LLC is the way to go.

Yeah I definitely know I run the risk because my assets aren't truly separate. Definitely want to get that fixed. What I was hoping I could maybe do is have one of the LLC function as the "Operations" LLC and it would own the bank account and then all transactions could use the single bank account? Not sure if that would work. Maybe have one LLC (parent) own the other LLCs (child)?

My only partner is my wife. The potential extra asset protection might not truly be worth and headache of running multiple LLCs and the LLCs not truly existing as separate at this point.

@Dave Holland

I hear you about the insurance its just odd because there is so much discussion about how the LLC is the way to go.

Yeah I definitely know I run the risk because my assets aren't truly separate. Definitely want to get that fixed. What I was hoping I could maybe do is have one of the LLC function as the "Operations" LLC and it would own the bank account and then all transactions could use the single bank account? Not sure if that would work. Maybe have one LLC (parent) own the other LLCs (child)?

My only partner is my wife. The potential extra asset protection might not truly be worth and headache of running multiple LLCs and the LLCs not truly existing as separate at this point.

Wont I loose asset protection by there being access to all properties if something were to go awry? Does the umbrella policy provide protection or just a means to pay out to someone if they sue?

Hello All,

I am getting to the point in my real-estate portfolio where the taxes are getting a little unruly. I have 4 rentals that are each held in a separate LLC for maximum asset protection (I know there seems to be debate whether this is the best strategy or if a umbrella insurance policy is good enough. I am curious if the umbrella insurance policy is definitely a better way).

This means I need to file a 1065 and K1 for each property. This makes spreading out some of my expenses (internet, meals, etc.) a pain. Is there a way to structure the LLCs so that a parent LLC or Operations LLC can files all the small deductions? Consolidate expenses?

I also don't have separate bank accounts for each LLC (although I'm told technically you should) so I'm hoping a different structure would allow one bank account to work, since that is what I'm using now.

Looking for some advice on how people with multiple units are structuring everything.

Thanks in advance

- Garrett