Asset protection with LLC

[Fred .]

If a real estate dealer starts an LLC to rehab properties, and will be dealing with all cash for the purchase of the properties and operating capital without any loans, what are the options available from an asset protection standpoint to protect that cash and properties owned by the LLC from liability against the LLC?

[Will Barnard]

Lines of defense:
1) Insurance (never under-insure to save costs, it is not worth the savings)
2) LLC
3) Operating the LLC as a seperate entity and business without comingling persoanl funds.
4) Operating the LLC responsibly and not being a slumlord. Negligence is the easiest way to have your corporate veil pierced.
5) Use property managers - Having a PM handle the day to day operations seperates you from having these ongoing daily responsibilities and provides evidence that the owner/manager of the LLC is a non-active participant in the daily operations, rather just a passive investor. This helps seperate you personally from liability arising inside the LLC.
6) Land Trusts (Don't actually provide asset liability protection but do assist in several aspects)
7) Additional Insurance (Umbrella Policy)