All Forum Posts by: Paige Harrison

@Michael Porche the one thing I like about Umbrella is that the premium is so low. I have a 2 million policy now, and it is $400 for the year. Can't beat it. 

Can someone explain how LLC protects beyond a 5 million umbrella policy? Maybe with a specific example?

I really appreciate your input. @Michael Baum and @Sarah Kensinger. 

My thought with STR insurance, and umbrella is that if the coverage is substantial enough, e.i. 5 million umbrella, then my assets really are not of concern... because the threshold is so high for them to even access them. The way my CPA explained is that when you are paying for the 5 million umbrella you are really paying for their lawyers because they do not want to pay out on that claim, so that is the primary protection.

If I am not understanding the way the STR and umbrella work, then please let me know, but it is my understanding that STR and them umbrella liability will protect me, personally.

Thank you everyone. This is very helpful. 

So the primary goal of the purchase if for a vacation home, with STR as a way to offset some costs. We were planning to get a second home mortgage. I am not sold on putting it into an LLC, I am thinking we keep it in our names and then do a TIC agreement have a strong agreement set in place, and then just going 50/50 on schedule E's for tax filing. And then for asset protection get STR coverage with a 5 million umbrella.

I do not want to risk the due on sale. 

Does that sound right?

I am looking for some advice on how to best structure this STR agreement.

My friend and I would like to purchase a vacation home, and it is already a successful STR so we would like to keep that up to offset the expenses. We are both busy professionals and don't have time to materially participate, so are not looking to do the STR loophole. That being said, I am trying to figure out the best structure for asset protection and tax filings.

1. My CPA said that if we do a partnership LLC, it would cost 1,200/year to file a partnership return, not prohibitive, just another cost. In that case we would be an LLC, and we would be restricted to commercial insurance coverage, which is not a bad thing, probably more expensive, I imagine.

2. We use our personal names via a TIC, and then go 50/50 for schedule E's for filing. I don't know that that looks like in terms of insurance, I do know that if we dont use and LLC we could use Umbrella, but I am not sure what that looks like if both of our names are on the deed. Could we both get 5 million in umbrella?

Planning to get second home mortgage for financing. 

Let me know thoughts! 

 Did you find a CPA to help with syndications?

 Jack, do you know how I can get added to an email list for this?Thanks!

 Hey Joe, shifting my focus to Canaan Valley at the moment. My Dad works at Timberline a few weekends during the winter, so it would make sense for him to have somewhere to stay during his shifts. That means less cashflow, but it would be more of an appreciation game. I think WV is going be the next MT/ID in the future...just not sure when. 

 Do you have any recommendations of companies?

I hear everything you are saying. I have been back and forth for years, and ultimately talk myself out if it. But I am ready to diversify my income streams, and want to get into RE for the appreciation, and hopefully cash flow. I am still deciding which medium makes the most sense for me. I am leaning towards syndications for the passivity (after my due diligence on the operator is complete). But I think I would like to have a rental property, as well. Maybe that looks like finding a partner that does the majority of the work, and I provide capital. Ideally, I would love a STR that I could use myself a few times a year, but I worry about PM/contractors falling through and then the passivity goes out the window.

I definitely have more work to do, but am appreciating all the feedback, and am motivated to get my foot in the door. Planning to attend some meet ups in the area to see what else is out there.