All Forum Posts by: George Bell

@Shilough Coy what kinda loans are you getting ? For me a 30 year DSCR loan is all about the amount of rent you get and if it can cover the mortgage. So it is solely based on the particular property. Doesn't matter how big your portfolio is.

@Nathan Gesner well she told this at a 1 hour monthly property management meeting as a member just talking about personal experiences so I didn’t get a ton of details . But I think she did extremely well for herself with her w2 job and from having the free and clear properties. So when the lawyer exposed the amount of assets and money she had , she got nervous and wanted it to be done with. She’s at retirement age and I think she was confident she would win but didn’t want to risk it since everything was on the table.  And the city this was in is definitely considered renter friendly. 

so do you have approximately an equal amount of assets in all 3 LLCs ? Or does each LLC have a different type of job responsibility - ie ownership , property management , contracting etc

@Nathan Gesner it was stuck in court for a while but they ended up settling outside of court. Insurance covered most of it but she had to pay six figures herself. She has a dozen or so properties in her personal name and said when they went to court the lawyer knew that , knew she didn’t have mortgages, the amount she had in her 401k and even mutual funds. She said absolutely everything she had was in the open . 

I have everything in one LLC currently but after hearing her story , I started down this path to find what direction I should go in for a worst case scenario.

How is your portfolio structured?

@Becca F. that definitely helps bring some peace of mind. I always want to prepare for the worst . I did just comment / replied to Nathan’s post here about someone locally who is getting sued . The story is under his comment . Tenant  Fell thru a second floor railing , lived In the unit over 5 years , never once complained about the railing. The property went thru bi annual inspections . Nothing was ever noted about the railing . No evidence of wrong doing but the landlord is currently in court processes for medical bills , ptsd , and a list of of things . 

@Nathan Gesner I’ve heard a lot of “stories” but recently in my local group one of the landlords had to go to court. A tenant “broke” a railing on the second floor deck and fell down and had medical issues they were sueing for along with PTSD and a bunch of over things . And the tenant lived there for over 5 years and never complained about the railing and there was never any previous issues.   And they said when they went court , absolutely everything they owned was public and on the table . So I’m just trying to set myself up the best I can. 

@John Morgan those are some good points ! After rereading Greg's comments at the beginning of this posts it makes me think . His syndicates hired lawyers to make a property management and an ownership LLC. But in the same comment mentions that it doesn't mean anything because they can just go up the rungs of the ladder and sue the ownership LLC. So how much protection is that even adding . The lawyers will see right through the management LLC with no assests / money and just come after the ownership LLC anyways

@Stuart Udis thanks ! That was extremely informative , I’m going to be doing some research on this information 

In Pennsylvania, I am allowed to self manage my own properties (without being a licensed Realator) as long as I have % ownership in the company the deeds name is in. So at my level I want to continue managing my properties . The 1% ownership will still allow me to legally manage my properties but it will help create another layer of protection having the management vs ownership LLC.

And seeing how at your level with the amount of units you have and experience, your set up in a very similiar structure so this. Which leads me to believe that option 3 will be better for protection compared to options 1 and 2 . 

@Greg Scott I am digging deeper hence the post on this forum.  He absolutely says that you will NEVER be fully protected.

So I understand what you're saying about the 1% agreement . But how would this be different than someone sueing your properties. They can still come after your ownership LLC and your management LLC . Either seperately or together. I'm trying to understand the difference?

@Greg Scott thanks for the input. I currently have 7 SFH but will be adding up to 5 next year . Right now all deeded in 1 LLC .
I belong to a big real estate investment group and we have a lawyer on retainer and he actually advises on #3. Is this how your syndications operate?