All Forum Posts by: Mitch Kronowit

Yes it has!

Despite my numerous requests, nobody has proved this claim. I've done quite a bit of research on the topic and most of the instances in where the corporate veil was set aside in court was during cases of fraud and misrepresentation.

My father used to work as a tax collector for the People's Republic of Kalifornia and on several occasions, took entities to court and attempted to pierce their veil and get at the tax evaders on the inside, but he was unsuccessful most of the time because the courts do not set aside legal veils readily. Unfortunately, that's about the most direct experience I have had with this issue.

Corporations and LLC were created for asset protection. If they didn't work, why are they still around?

I've asked this many times as well, i.e., real "war" stories from the front line. But despite all the newspaper articles and police shows on TV, I find a large majority of people never ever get sued.

We purchased a condo last year that already had tenants as well. However, the listing agent provided us with the estoppel, so request one if the sellers don't offer one up.

More info:

http://www.vanewsblog.com/2012/07/va-loan-reader-question-what-happened-to-va-vendee-financing/

I wonder if this means BofA will no longer be providing the loan servicing for the VA Vendee home we purchased in 2010? That would be happy news.

BTW, all these companies, BofA, Ocwen, VRM, et. al., are NOT Vendee "lenders". The VA owns these homes and they are providing the financing, i.e., seller financing. The processing and administration for the Vendee program is what these other companies do.

Hi Sabrina,

I don't know much about Colorado law and I'm not an attorney, but I can tell you what we have done out here in California that may steer you in the proper direction and help you ask the right questions.

I'm not sure what you mean by "condominium" insurance. Typically, there is a Master Condominium Policy on the entire development that the HOA pays for (with your dues money). This covers the basic structure of the building and grounds. However, you're going to need to insure the interior of the condo and it's fixtures, such as carpet, hard wood floors, kitchen cabinets, chandeliers, etc. You're also going to need liability insurance in case a tenant or visitor gets hurt on the premises.

The policy you will get won't quite be a homeowner's policy since you won't be living there. My carrier calls it a "Fire" policy (I guess it covers everything a fire might do to the place, including the flood caused from putting the fire out), but I've also heard them called "Landlord's" policies and maybe even "Rental" policies.

What you don't want, but your tenants should have, is a "Renter's" policy. This covers their personal belongings and nothing more. So, if lightning strikes and burns the entire complex down, the Master Condo policy should rebuild the building, your "Fire" policy should finish the interior of your unit (new paint, flooring, cabinets, appliances, etc.) and possibly even cover your lost rent while the premises are uninhabitable, and your tenant's "Renter's" policy should replace their flat-panel TV, sofa, bed, clothing, laptop, etc.

Our insurance carrier simply added our LLC as an additional name insured on our policies. So we're covered as both individuals and an entity.

That's not entirely necessary, but not a bad idea if you're very close to conducting business. That way everything is in place from day 1 of your first rental.

This has been a huge topic of discussion here on BiggerPockets. If the tenants know your name (I hide mine from most of our tenants), then some attorney is sure to sue everyone and anyone that he can think of. However, just because you're named in the suit doesn't automatically mean you're personally liable. The way my attorneys explained it to me, if you conduct your business in a responsible manner and maintain your entity properly so there isn't any fraud or misrepresentation, then your attorney should be able to have the court dismiss the personal suit against you and force the plaintiff to sue your LLC by itself.

Maybe true, but that sounds completely different than a "business" decision.

How do they know you've run, or even taken, multiple applications unless you tell them?

What Steven said. Nevada corporations are for Nevada businesses. If your business is in any other state, all those "goodies" the gurus put out about incorporating in Nevada don't apply.

BTW, what exactly do you want to incorporate? Do you have a business currently in Colorado? Another state?

"I was told I only had six months to live, but I couldn't pay my bill, so the doctor gave me another six months." ;-)

In the event of several applications, we pick the most qualified one. If a tie, then we go by time and date of application (first come-first serve). If we have run a credit check on any applicant and subsequently deny them on a account of their credit score/history, then the law requires we explain to them why they are being denied in writing.

I'm not an attorney, but if you and your partner are interested in holding rental property, an LLC is probably the best way to go. Don't form your own individual LLC's (more work than necessary). Simply form one LLC that will purchase the property(ies) and figure out how many units (shares) each of you will own, 50/50, 60/40, etc. You might even enjoy some good charging order protection from Illinois state, but I'm not sure.

You'll also need a good operating agreement that will spell out each member's right and responsibilities. This is probably a job for a real attorney and not one of those online LCC mills. Good luck.