All Forum Posts by: James Kendrick

This is a great story.  I'm surprised that the city didn't use the "act of God" defense on the fallen tree.  Seth are you in the legal profession by trade?  Or were you just fed up? 

@Jordan H. 

I would think to break up a concrete floor, remove the concrete and dig down to the top of the footer, remove dirt by hand, and pour new concrete would cost anywhere from $5k to $8k.  That is before you build new stairs.  This is 99% manual labor.  But first you need to find out how far down to the footer.  If you have to lower the footer you need to bring in a structural engineer and add maybe another $15k to the price?

I will echo what @Ned Carey has said...you can't dig below the footer so you've got to have someone come in and extend the footers down far enough to get the desired headroom.  From what I have been told it is a slow and expensive process.

Everyone if there is one thing that you must remember in protecting your net worth it is this:  No one ever wants to go to court.  The plantiff's attorney wants quick cash for his or her client.  That attorney wants everyone to know that they are on the right side of the law.  Insurance companies never want to go to court.  They want to settle quickly and painlessly.  So put a plantiff's attorney in a conference room with an insurance company and they fight it out for 2 days and they settle.

If you put an LLC into the mix you better go full throttle because the plantiff will want blood.

@Tim Priebe 

Tim I disagree with the notion that insurance companies are not named as defendants in lawsuits against the insured.  I also disagree with the notion that LLCs do not come into play when they are also named as defendants.

Plantiffs name the insurance companies just to get them negotiating quicker.  Once the insurance company has been served the defendant doesn't even need to file a claim because the lawyers are already preparing a defense.  The plantiff is basically saying "You can either show up in court and get yourself removed from the lawsuit (which will result in delays, money, and uncertainty for everyone) or you can bring a settlement to the table and start moving things along quickly. 

Additionally, the defendant is always named personally even though the LLC is in place. All of the other LLCs are named as well. The defendant will spend countless amounts of time, money, and sanity just trying to convince a judge that he or she cannot be named personally. By the time that a judge has sorted out who is the plantiff and who is the defendant the LLCs may or may not stand. But as the defendant you have already cut a check for $5k to set up a bunch of LLCs, $10k retainer, $30k in fees, and your lawyer stops taking your calls because you want to know how much this trial is going to cost. And $50k to $100k later if you are lucky you might eventually get the case dismissed. And you have won! But your net worth has been wiped out in attorney fees.

A $2 MM umbrella can be purchased or $400 per year.  And it's tax deductible!

@Seth Mosley  

I am a buy and holder type.  But don't make asset protection decisions based on what I am saying.  Go talk to some attorneys.  Not the ones that defend you but the ones that litigate for plantiffs. 

As to the question of insurance companies not paying, they will be named as a defendant alongside you and your LLCs so it doesn't matter.  They can't choose not to defend or pay unless you have criminal liability.  And then you need a different kind of attorney.

I'm not sure what is meant by an intentional outcome.

@Seth Mosley 

Check out my other responses on this very topic.  To find out how to protect yourself you need to visit an asset protection attorney.  But more importantly you need to speak with a wrongful death litigation team to find out how they dismantle LLCs in court.

LLCs were never designed to be used by participants in commerce as asset protection vehicles. The purpose of an LLC is for an entity to meet the legal characteristics of a C corp and the pass-through characteristics of a partnership. Asset protection just happens to be a side benefit. When a judge determines that a defendant has established an LLC for legal protection and not for use in commerce, that judge may disregard the legal structure of the LLC and look through to its owners. And do the same for every other LLC that the owner might have an interest in. In other words, the hurdle to clear in attaining the asset protections of an LLC are very high. Judges have been known to disregard LLCs simply because a third party guarantor is involved in a financing arrangement.

Nothing against lawyers but they like to pitch LLCs like wills and trusts because they are very easy to setup and the fees are good. A young attorney who needs billable hours is quite eager to pedal LLCs to build a clientele. It's just the way the law firms work. The problem is that those attorneys have never had to defend the LLC.

Avoid the LLC until you have multiple millions of $$$ to protect. Then you bring in a high-powered law firm and they do everything. Meanwhile, make sure you are maxing out 401k plans and pensions if available. These assets fall under Federal ERISA protections and cannot generally be taken away from you. Next, to the extent you are eligible, max out roth IRAs, traditional IRAs, and SEP IRAs as they offer a great deal of asset protection as long as you don't play games. Then look at 529 plans depending on your state.

Go get minimum $1 MM of umbrella insurance (you probably need more).  This will serve you well and is very cheap.

Wrongful death attorneys are very skilled at dragging LLC members through court for so long that you will regret ever owning any real estate. Insurance companies know how to play this game and settle quickly.

If you have to ask whether or not you need an LLC then you don't need one. Get lots of insurance and do not give up current asset protections on ERISA assets.

@Sean Cavanaugh They are discriminating against you based on your income, which they should be doing. On a VA loan you either fit inside the box or you don't. You need to achieve a maximum debt to income ratio for the loan to proceed. You either have that income or you don't. If income is sketchy, infrequent, inconsistent, unseasoned, or uncertain then the bank is required to exclude it when considering your ability to repay. Tax returns (2 years) are generally the best way to show the bank that you have stable income.

Once you approach the 95 to 100 LTV area you become a serious credit risk for BAC even if they sell the loan to GNMA regardless of your overall financial situation. Think about the crazy mess BAC has been involved in with illegal foreclosures, not modifying loans quick enough, not working with borrowers, DOJ prosecution, loan buybacks, the Countrywide merger, etc. They do not want to be foreclosing on you in the next couple of years for the headline risk alone and are doing everything possible to make sure you will not default on the loan. One way to protect the bank is to heavily scrutinize applicants when they want to bring very little cash to the table.

@Christopher Johanson I'm guessing that you signed paperwork authorizing the hard pull.  If you didn't you can dispute the inquiry with the bureau that was pulled. 

Looking at the bigger picture, you are overreacting on this.  Credit scores are not a winner's game.  Once your score reaches a certain level it doesn't really matter if it moves up or down 50 points. 

The smart investor will max out a zero percent balance transfer for 12 months versus hard money at 12% or more.  I use the word "smart" because you are basically renting your credit score to the bank.  And they are paying you large sums of money to do it.