RE Investing: LLC, C, or Self

[Shadowfax]

Delaware is da bomb.

But Nevada is building a good following. They don’t have much case law of their own–so when they interpret their own statutes, they have to borrow from other states and frequently borrow from their good neighbor CA. But they are getting some traction with the business community for being very pro-business, which is good. Best to you.

[Ash Housewares]

[quote=Shadowfax]NOT GIVING LEGAL ADVICE, but…..

CA will soak you for $800 a year and you will still want to get insurance, etc for the property.
The benefit of having an LLC own the property is that any claims are limited to the investment and profits of the LLC. If that amounts to $50K,then that is all the plaintiff gets. They can’t go after your personal assets. Some investors even put each investment property into its own, separate LLC so that the liabilities of one property cannot be levied against the other(s).
[/quote]

Since you still need the insurance, why bother with the LLC? Would not an umbrella insurance policy accomplish the same thing- i.e., take the hit in case of a lawsuit, leaving your assets intact? Assuming of course that any settlement is below your insurance liability limit of say 1,000,000.

[Ash Housewares]

[quote=Shadowfax]NOT GIVING LEGAL ADVICE, but…..

CA will soak you for $800 a year and you will still want to get insurance, etc for the property.
The benefit of having an LLC own the property is that any claims are limited to the investment and profits of the LLC. If that amounts to $50K,then that is all the plaintiff gets. They can’t go after your personal assets. Some investors even put each investment property into its own, separate LLC so that the liabilities of one property cannot be levied against the other(s).
[/quote]

Since you still need the insurance, why bother with the LLC? Would not an umbrella insurance policy accomplish the same thing- i.e., take the hit in case of a lawsuit, leaving your assets intact? Assuming of course that any settlement is below your insurance liability limit of say 1,000,000.

[Ash Housewares]

[quote=Shadowfax]NOT GIVING LEGAL ADVICE, but…..

CA will soak you for $800 a year and you will still want to get insurance, etc for the property.
The benefit of having an LLC own the property is that any claims are limited to the investment and profits of the LLC. If that amounts to $50K,then that is all the plaintiff gets. They can’t go after your personal assets. Some investors even put each investment property into its own, separate LLC so that the liabilities of one property cannot be levied against the other(s).
[/quote]

Since you still need the insurance, why bother with the LLC? Would not an umbrella insurance policy accomplish the same thing- i.e., take the hit in case of a lawsuit, leaving your assets intact? Assuming of course that any settlement is below your insurance liability limit of say 1,000,000.

[Ash Housewares]

[quote=Shadowfax]NOT GIVING LEGAL ADVICE, but…..

CA will soak you for $800 a year and you will still want to get insurance, etc for the property.
The benefit of having an LLC own the property is that any claims are limited to the investment and profits of the LLC. If that amounts to $50K,then that is all the plaintiff gets. They can’t go after your personal assets. Some investors even put each investment property into its own, separate LLC so that the liabilities of one property cannot be levied against the other(s).
[/quote]

Since you still need the insurance, why bother with the LLC? Would not an umbrella insurance policy accomplish the same thing- i.e., take the hit in case of a lawsuit, leaving your assets intact? Assuming of course that any settlement is below your insurance liability limit of say 1,000,000.

[Ash Housewares]

[quote=Shadowfax]NOT GIVING LEGAL ADVICE, but…..

CA will soak you for $800 a year and you will still want to get insurance, etc for the property.
The benefit of having an LLC own the property is that any claims are limited to the investment and profits of the LLC. If that amounts to $50K,then that is all the plaintiff gets. They can’t go after your personal assets. Some investors even put each investment property into its own, separate LLC so that the liabilities of one property cannot be levied against the other(s).
[/quote]

Since you still need the insurance, why bother with the LLC? Would not an umbrella insurance policy accomplish the same thing- i.e., take the hit in case of a lawsuit, leaving your assets intact? Assuming of course that any settlement is below your insurance liability limit of say 1,000,000.

[Shadowfax]

That is true–I know a business owner who is a renter with 2 10-year old cars and his business as his main assets. (Maybe he has a 529 for his kid and a 401(k).) It doesn’t make much sense for him to pay the $800 a year to have an LLC, rather he just pays for insurance and, whether or not they hit his limit, he’s pretty-much judgment proof. THey can go after all the personal assets they want and they’ll get about $10k for their trouble–won’t even pay for the lawyer fees. Not to mention that if a plaintiff blows through $1M in insurance, I don’t think a judge would take the business owner’s life away over mere negligence. So forming an entity is not the right choice for everyone.

UNABASHED PLUG FOR PROFESSIONAL COUNSEL: that’s what lawyers and accountants are for–to help you walk down the decision tree on each criteria on whether to form an entity and which is right for your situation.

[Shadowfax]

That is true–I know a business owner who is a renter with 2 10-year old cars and his business as his main assets. (Maybe he has a 529 for his kid and a 401(k).) It doesn’t make much sense for him to pay the $800 a year to have an LLC, rather he just pays for insurance and, whether or not they hit his limit, he’s pretty-much judgment proof. THey can go after all the personal assets they want and they’ll get about $10k for their trouble–won’t even pay for the lawyer fees. Not to mention that if a plaintiff blows through $1M in insurance, I don’t think a judge would take the business owner’s life away over mere negligence. So forming an entity is not the right choice for everyone.

UNABASHED PLUG FOR PROFESSIONAL COUNSEL: that’s what lawyers and accountants are for–to help you walk down the decision tree on each criteria on whether to form an entity and which is right for your situation.

[Shadowfax]

That is true–I know a business owner who is a renter with 2 10-year old cars and his business as his main assets. (Maybe he has a 529 for his kid and a 401(k).) It doesn’t make much sense for him to pay the $800 a year to have an LLC, rather he just pays for insurance and, whether or not they hit his limit, he’s pretty-much judgment proof. THey can go after all the personal assets they want and they’ll get about $10k for their trouble–won’t even pay for the lawyer fees. Not to mention that if a plaintiff blows through $1M in insurance, I don’t think a judge would take the business owner’s life away over mere negligence. So forming an entity is not the right choice for everyone.

UNABASHED PLUG FOR PROFESSIONAL COUNSEL: that’s what lawyers and accountants are for–to help you walk down the decision tree on each criteria on whether to form an entity and which is right for your situation.

[Shadowfax]

That is true–I know a business owner who is a renter with 2 10-year old cars and his business as his main assets. (Maybe he has a 529 for his kid and a 401(k).) It doesn’t make much sense for him to pay the $800 a year to have an LLC, rather he just pays for insurance and, whether or not they hit his limit, he’s pretty-much judgment proof. THey can go after all the personal assets they want and they’ll get about $10k for their trouble–won’t even pay for the lawyer fees. Not to mention that if a plaintiff blows through $1M in insurance, I don’t think a judge would take the business owner’s life away over mere negligence. So forming an entity is not the right choice for everyone.

UNABASHED PLUG FOR PROFESSIONAL COUNSEL: that’s what lawyers and accountants are for–to help you walk down the decision tree on each criteria on whether to form an entity and which is right for your situation.

[Shadowfax]

That is true–I know a business owner who is a renter with 2 10-year old cars and his business as his main assets. (Maybe he has a 529 for his kid and a 401(k).) It doesn’t make much sense for him to pay the $800 a year to have an LLC, rather he just pays for insurance and, whether or not they hit his limit, he’s pretty-much judgment proof. THey can go after all the personal assets they want and they’ll get about $10k for their trouble–won’t even pay for the lawyer fees. Not to mention that if a plaintiff blows through $1M in insurance, I don’t think a judge would take the business owner’s life away over mere negligence. So forming an entity is not the right choice for everyone.

UNABASHED PLUG FOR PROFESSIONAL COUNSEL: that’s what lawyers and accountants are for–to help you walk down the decision tree on each criteria on whether to form an entity and which is right for your situation.

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