All Forum Posts by: Joe Nguyen

We highly recommend to our clients they use some form of asset protection. See our "tier list" below: 

Worst:

– No coverage, held in your name.

Bad:

• Relying on insurance. This is the most basic level of protection and it is not very effective, but it is still better than nothing. Insurance companies have many exclusions and they may not cover everything, but they can help to pay for some of the costs of a lawsuit.

Good:

• Using one LLC for all of your rental properties. This is better than relying on insurance because it protects your personal assets from liability. However, if someone sues you and wins, they could take all of your rental properties.

Better:

• Using a separate LLC for each rental property. This is the best level of protection because it isolates each property from the others. If someone sues you and wins, they can only take the LLC that owns the property that was involved in the lawsuit.

Best:

• Using a combination of LLC and land trust to protect your rental properties. These are more complex legal structures that can provide even more protection than a traditional LLC alone.

Here are some of the key things to keep in mind when choosing an asset protection strategy for your rental properties:

• Your risk tolerance: If you are not very worried about being sued, you may not need the best level of protection. However, if you are worried about being sued, you should use the best level of protection that you can afford.
• Your state laws: The laws governing asset protection vary from state to state. You should consult with an attorney in your state to make sure that you are using the best asset protection strategy for your situation.
• Your budget: The cost of asset protection can vary depending on the type of protection that you choose. You should make sure that you can afford the cost of the protection that you choose.
  
  Please also keep in mind for your situation to consult a professional and share more details! 

As someone who recently had to form a foreign LLC for an out of state property that I own, I definitely wouldn't do it unless I absolutely have to. The way I did it was I formed the LLC where the property is located and got a certificate of registration so I could have a bank account in the LLC's name in my state.

I could have also formed the LLC in my state (Virginia ) and applied to the other state for authority but it seemed like even more work.

This is the link for Virginia  https://www.scc.virginia.gov/. If you do form the LLC call the help desk and ask what steps need to be taken in order to form the domestic LLC.

That's what I did, Joe.  An umbrella policy and maxing out the available liability coverage of the LL policy, usually $500k per asset. 

Since driving is our largest liability, our auto insurer is usually best carrier to get umbrella from. 

I've never bothered with an LLC for residential rentals.

I have 4 for my commercial properties.  

The LLCs are in the state of the property.  

Keep it simple @Joe Nguyen

***********. I haven't used it for a few years because i'm closing my rentals down. (I'm in Seattle).   You invite the tenant, he runs and pays for the credit check, then he ok's you to see the complete report. A complete report, not just credit score.  As for background checks, they're flawed. (at least in Seattle) By law they will not show certain criminal history or eviction history because of renter protections. If you want the real skinny, go to your local courthouse and look them  up, see if they have any criminal or legal history. That's where you have to go. And its worth the effort. One bad tenant can kill your business.

 PLEASE hire a PM co. Do you know what to do when they fall behind in rent? How to evict? Do you know what it should cost for repairs ? Why deal with any of it , let them handle