All Forum Posts by: Nick Brubaker

Hi everyone,

I am looking for a new tax professional (not sure it needs to be a CPA) that can do our yearly returns and provide occasional advice and strategy guidance.  We are in Georgia and are small time buy-and-hold investors with some plans for house hacking and some renovation projects in the coming years, as well as a possible 1031 exchange.  We are W-2 employed otherwise with a family.  

I'd really appreciate any recommendations!!

Hi everyone,

I have a single family rental here in the Atlanta area with an old roof (3-tab shingles) that I want to replace.  Can any of you recommend a good roofer or company?  I'm looking for someone insured and who will do good work without costing top dollar.  

Thank you!

Thanks for the explanation @Jason Bott (I think we may have spoken on the phone a while back).  

Is it not typical for mortgages to be in an individual's name when owned by an LLC? My lender (Northpointe) was not able to lend to the LLC so I assumed that is not possible in general. I have refinanced twice and both times it was in my name with a Quit Claim sandwich so to speak at closing. Is it actually more common when owning a property with an LLC to have the loan be to the LLC itself and this IS actually a unique situation I am in?

Or is it as you suggest something that is more common for smaller timer investors like myself and in which case what is the typical/recommended structuring when property owned by LLC and loan in individual's name?

If:

- It is typical for small-time investors to finance using their name

- It's more expensive to finance using the LLC (and too late now anyway)

- I would still be covered effectively with myself as Name Insured and LLC as additional

- The LLC is a thin veil anyway

It seems the best way forward is to update the Name Insured...

Thanks @John Mocker. As an insurance agent and "#1 insurance contributor" I want to be clear on your opinion on the eligibility/validity of the insurance (business policy) having me as the Named Insured with the LLC as an additional insured. Do you have concerns with that? That seems to be an easy and likely path forward to make the lender happy without changing ownership.

Owning properties through LLCs is common, I'm surprised there's not consensus on how the insurance naming should go in such cases.  

Thanks a lot. 

Thanks @George Randall.  Yes, I'd say you have it right.  And to be extra clear:

- Property owned by LLC (originally paid cash so no lender initially)

- Named Insured on insurance has always been the LLC

- I checked back at my records and recalled that when refinancing with the lender we Quit Claimed the deed to myself before and then back to the LLC after closing. This was suggested by the lender themselves and they were fully aware. They have also had access to my insurance policy details.

Switching Name Insured to myself directly and having the LLC as additional insured would be easy enough and I supposed acceptable for me, though I have some concern around some suggestion here of this undermining the eligibility/validity of the insurance coverage against me or the LLC as technical owner.

I may need to create a simpler post that just asks how others have structured things who have properties owned by LLCs with insurance and financing.  Is this not common?

Thanks @Wayne Brooks and @John Mocker. I just checked back at the printed closing paperwork I have and am remembering (seeing the two Quit Claim deeds) that in closing the refinance we switched ownership to me at the beginning and back to the LLC at the end. We did this together though so they know and were ok with the transfer back to the LLC. They also again have had access to the insurance details.

Sorry, John, still confused by the below. My insurer, American Family, has from the beginning not had issue with the LLC being Named Insured on the policy. If I confirm that they only do this for solo-member LLCs I can feel better about the eligibility?

"2. is it in the company's guidelines that they will write the LLC as owner but only if the member is the first named insured. If not, is it truely eligible?"

I don't want to go to my insurance agent yet because he may be quick to solve this by changing the Name Insured to me (LLC as additional) and I'm not sure I want this yet. I also think I might wait to see if the lender follows up again, since they clearly haven't had issue with it up to now.

Thanks @John Mocker. I did not tell the lender the property is in my name. I gave them the policy declaration which clearly shows it is in the LLC's name.

What do you mean by "if that company would not write the policy in just the LLC"? It is a business policy.

I wonder how easy/possible it would be to change the mortgage to the LLC like you said (I think it wasn't possible in the first place) or make the LLC an additional insured. I'd rather not change the owner.

Thanks again.

@Robin Simon Me individually.  Pretty sure that was required.  No issue with the insurance at the time.  

Hello all,

I have a rental property bought with cash (no original financing) and owned under an LLC. I later refinanced it. My insurance policy has recently been discontinued and replaced with a similar policy (really just internal renaming/IDing). Just received a message from my mortgage bank that the:

"Name Insured on the property is not correct. According to our records the Named Insured should read as follows --My Name not LLC--. To comply with the terms of your loan, please contact your insurance agent and request the Named Insured on your policy be updated accordingly.."

How do you advise following up on this? The rental is owned under the LLC for a reason. What are the implications of the insurance naming the LLC or my own name (single member LLC btw)? Is there reason to push for keeping the LLC the Named Insured and is that even an option typically? Is the solution to have myself as the name insured and the LLC as an additional as I've seen suggested in a couple other posts? It is a business/commercial policy.

Thanks @Caroline Gerardo. Maybe it wasn't completely clear but I didn't buy with financing ("bought with cash"). The property and insurance were in LLC's name when I refinanced.