There “may” be additional legal protections the LLC would provide… but I am of the opinion that a solid insurance protection plan is just as good as an LLC if not better (insurance also pays to defend, while LLC does not).

I only use leases prepared by my attorneys in the 2 states we have rentals...the attorneys will be defending them in an eviction, and you want to make sure the terms are legal and up to date.

Don't make it perfect only to repeat the issue again and again....Your cabinets are nice, but I can tell by your sink, fixtures and that ledge above the sink that this isn't a high end unit.....don't over fix it......I think you are going to have a hard time defending the 50:50 split to replace the entire set of counter tops...... most tenants are going to fight that much $$ and the judge is probably going to side with them..... good luck......

I'm still willing to give Clayton the benefit of the doubt, but he (or his investment partners) has to defend himself.

I know he's your buddy and you are defending him, but there's really nothing to defend.

Although I agree with a lot of what has been stated above about making sure this gets paid ASAP, based upon what I've seen in this arena I would just make certain that notice of the claim has been properly given under the policy and then let the insurer deal with it.Making payments (essentially settling on behalf of the insurer) and assuming they will be covered and reimbursed in full carries some risk and may actually conflict with the terms of the policy... give us timely notice; let us fix, defend or pay; cooperate, etc. 

I own properties in Colorado and Central Iowa, I haven't lost money in Iowa, but at lot more mistakes can be made when we are going for 4-8% appreciation in Colorado than trying to defend 50-100 per door in central Iowa. 

The reason is that filing 1099s can be an important factor if you have to defend treating your rental business as a true "trade or business," in the IRS definition.

#1 person to ask is your CPA...as they are going to have to help defend you on whatever actions you take.My guess is you cannot do what you want to do, and actually all this probably would hurt you if you could do it in the long run.I would think there are rules about self dealing that would prohibit this.The second concern I can think of is capital gains taxes....so the LLC would have to recapture the depreciation when you sell it and pay capital gains taxes on the profit....vs if it is your personal home, chances are you will have no capital gains.Nice way of creative thinking, but I think if it were this easy to make big profits, everyone would be doing it.   

Having a LLC doesn’t eliminate the need for the insurnace — you need their lawyers anyway to defend against the lawsuit otherwise you’ll go broke protecting the assets in the LLC...So, while the LLC is there to provide a legal limited liability separation, it comes at a cost (in many ways significant) and it may not be worth it.