Originally posted by Edita D.:
-you have to create LLC in a state you live, otherwise it will NOT be protected under the LLC, since you have to pay taxes/fees depending on your state. We have properties in CA and NV, and have to pay 800$/year tax for CA, amd 350$/year some kind of fee for NV - loss of income
That runs contrary to what Garret Sutton says. Maybe because it is CA where it's very renter friendly and easier to "pierce the veil"? I think CA LLC's are the weakest around. I don't claim to be an expert. I'll do some more reading when I get the chance and post back.
-you have to transfer the property's title into the name of LLC,which will cost 300-500$ in attorney money-loss of income. And, there's no guarantee your insurance carrier will no drop you! I called mine: they will drop my policy if I wanna put it into LLC..
I suspect that dollar figure you quote is highly dependent on many factors. I know CA fees are among the worst around, and NV's used to be cheap, but are now getting fairly expensive in their own right. So I would encourage people to check it out on their own.
Overall, if you are just starting out and do not have lots in assets, you are fine having a 2mln umbrella over EVERYTHING that u have: cars, homes, etc.
Lets take my previous example and assume I have 1 million in assets. I buy a 3 million umb policy. What if there is faulty wiring in my house and it winds up burning down several properties and I get slapped with the $5M lawsuit? I would lose EVERYTHING! Personally, I simply don't want to assume the potential risk of exposing my life's work to our judicial systems whims, just to gain an extra 1-2% ROI.
Seems to me this is a very important decision that shouldn't be taken lightly. I wouldn't trust me or anyone else. I would treat it as due diligence and research it to the last decimal.
