In that case, insurance would have maxed out and the entity would have gone bankrupt, but if the LLC members had millions of dollars in their personal bank accounts that money would be protected IF they had correctly maintained their entity.

IMO, worst case is you're bankrupt and tossed out of business.If you borrowed money and lost investor money, pulled some substitution of collateral magic, failed to qualify borrowers, did OO properties, did 40 loans, had 12 past foreclosures.....well, you might be going to jail.With all of that thinking out loud; these issues will be difficult to prosecute at a local level, as much as I hate to agree with Joe Gore on anything, his constant posts about we have to wait and see is actually true.

You don't want the title co. to go bankrupt whilst your funds are in the escrow account.

Private money has many issues that are often overlooked, people die, they become incapacitated, go bankrupt, get sued, get divorced and circumstances change where they can become difficult to deal with when they want their money back, banks usually don't have such issues.

Ok, the numbers don't really work, but the dad wants to see you out of debt quick and really the only forclosed and bankrupt properties are from debt...hmmm, maybe a wise point to contemplate.

Eventually he went bankrupt and we bought him out and continued to expand.Good luck!

Somewhere along the way, Detroit became our national ashtray, a safe place for everyone to stub out the butt of their jokes.Every American should be sickened by the news that Detroit is bankrupt.

@ @Jay Hinrichs undefinedYikes we covered a bunch of ground.The reason many investors went bankrupt was a combination of 1% properties,  leverage, a recession, sinking property values, and capital expenditures that came up early in their ownership.  

I have gone thru a recent bankruptcy and a foreclosure 2 years ago, what options do I have in getting into small duplex rental investments and working my way up to larger multi- family in the future?

What can I be ...

I have gone thru a recent bankruptcy and a foreclosure 2 years ago, what options do I have in getting into small duplex rental investments and working my way up to larger multi- family in the future?

What can I be ...