I’ll send you a PM with the agent that quoted it. He was in San Diego and said he could do it. Very nice guy. But I ended up going with another agent in the San Diego area because his quote was SO MUCH lower and he was very on the ball.
The key with Farmers or any other agent/agency for that matter is it’s ESSENTIAL to use an agent that has structured this sort of thing before. Many have NO experience on this so right from the get go they say “it’s not possible”. I ran into that MANY times, hence me starting this thread.
Not many agents/agencies have experience with this. Those that don’t pretend like they know what they are talking about. (But they really do NOT). I got some odd ball quotes and some of them were 300% higher than what I ended up paying.
And some agencies/agents were really unethical making it seem like no one does this and that it will cost an arm and a leg if you want it done, which is NOT the case.
I ended up switching my auto insurance with them and bought an umbrella policy to boot as their rates were so good. I’ll send you a PM with his information as well.
Also, just as an FYI… I put the homeowner’s insurance under the LLC with my name listed as an additional insured. But I also had to purchase a separate renter’s policy for the furniture and contents. It wasn’t expensive but just for legal reasons that’s how all the insurance companies said it had to be structured as well as my lawyer. But it was a piece of cake and I used the same insurance company.
Many of the online companies like Geiko, Progressive, etc. can’t insure properties in California that are valued over $700,000 so keep that in mind.
Also, I guess there is some law in California that they must actually have to come out and see the house and do an appraisal if the purchase price is over $750,000. Before I closed, the insurance company agent had to go out and do a walk through. Then after I closed they also had a third party company contact me and they had to do an appraisal. (There was absolutely no cost to me for the appraisal).
I ended up insuring for more than the cost that I paid when you factor in the cost of the land. The replacement cost to build a new house is more than the cost that I purchased the house for. Really the ONLY risk that I’m truly worried about is Fire. I’m not worried about anything else as I purchased in Santaluz and that neighborhood is so secure with security guards everywhere and it’s a gated community.
Many of the larger insurance companies don’t want to hassle with this but I did find a few agents that were on the ball and apparently this is becoming more common they were telling me, especially with their more affluent clients.
Also, I did end up calling the Franchise Board in California and they said my lawyer was correct that I didn’t need to pay the $800 annual franchise tax fee in California as no “business is being conducted” with the way my lawyer set up my LLC in Delaware.
They did ask me how the Articles of Incorporation and Operating agreement of the Delaware LLC was worded and my lawyer specifically mentioned that it was to be used as a primary residence along with some other specific legal jargon. (So I really recommend you talk to an attorney that specializes in this sort of thing).
The fact that each month i was transferring funds from my personal account to my business account (also owned by me) they confirmed wasn’t necessary to pay the annual $800 annual fee to California with the way that things were worded.
Just be clear how you set up your Articles of Incorporation and wording in your Operating agreement as apparently from what they told me it makes a difference if you have to pay this $800 franchise tax to California. I know there are some cheapo online places to get a Delaware LLC but I’m glad I hired a competent attorney that specializes in this. It wasn’t cheap but I don’t regret it.
But even if the law changes in the future and I will need to pay the $800 annual fee to California, in my specific case it’s still worth it to me.
Also, an FYI that Bank of America is the best and easiest bank to set up an account for an LLC. They made it super painless. I did have to email them all the documents and paperwork, my paperwork from the IRS for my EIN but it was easy.
I also set up a business account with Wells Fargo and it was like pulling teeth! Even though I already have been a Premier client of Wells Fargo, have tons of accounts with them ….. it was painful with tons of paperwork and there was a small typo on my Operating Agreement and they asked that it be redone… I did end up getting one there too but I’d highly recommend Bank of America as it was so much easier.
The funny thing is Wells Fargo asked for copies of utility bills and bank statements and I have 5 different accounts with them already! I told them to look at my account and they could verify the address on it! Even being a long-time customer of theirs where they could verify all my information they still asked me to send in a copy of utility bills which I found strange.
For both of these accounts that I set up I never had to go into a physical branch. I was in Hawaii for the entire month on vacation and there were NO Wells Fargo or Bank of America branches so I set both of these up online. Maybe that is why Wells Fargo was so strict with the paperwork but still seemed strange to me.
As it stands, I need to pay $200 a year to Delaware and I have to pay $100 /year to a lawyer in Delaware that lets me use him as a Registered Agent for me in Delaware in order for me to have my LLC there in Delaware.
I hope this information helps as I couldn’t find hardly any information online when I was doing my due diligence.
Cheers.
Earl Lee
PS. Any one feel free to PM me and I’d be happy to send you the contact details for the agent that I used. He was extremely responsive always returning emails the same day (typically within hours), returning phone calls and just a joy to deal with. His rate was much lower than many other companies and his auto insurance as well was lower than what I was paying.
PSS – If you have to ask what the benefits are or why someone would want to do this then most likely you would never have to structure something like this. But for those that have the circumstances to take advantage of this set up….. I hope you find this helpful.
