BiggerPockets

After holding a few properties in my name, I decided to start an LLC for asset protection as it is recommended everywhere, so my latest property is held in that LLC.
I find it so unconvenient to have an LLC, insurers don't want to ensure rental properties under LLCs, banks don't want to refi LLC... why not just get liability protection and forget about LLCs? so some of you agree and hold all your rentals in your names, or if you have LLCs, how do you deal with banks and insurers?

are you sure that commercial insurers insure duplexes and not just apartment buildings / or commercial buildings?
same with the banks? I have residential properties (sfh, duplex..) under an LLC, is that still commercial?

I have found that most of the residential insurers that do business in my area will write a policy for an LLC, but it must be a single member LLC and many (but not all) allow only one property per LLC. So maybe you need to check with a different agent.

LLC is fine but they still usually want a recourse loan or personal guarantee.

If they don't ask for that then you are paying for it somewhere in a higher rate or terms etc.

For insurance you can use a Fire/Dwelling policy which is much cheaper than a commercial policy.Some of the best insurers depending on age of the building will not write the policy.

You have to know how you want to set up going in and the costs involved and offer your purchase price based on that.I don't hold in my name.

I held one rental in my own name for a decade without any issues. But when we added a second rental to our portfolio, we also got our first problem tenant. That's when we started looking at business entities, not only for the asset protection (insurance protects us fairly well there), but for privacy as well (as much separation between us personally and our tenants).

Transfer from our names to our LLC didn't cost us any extra in term of taxes (transfers were to a "wholly owned entity") and our insurance carrier extended our coverage to our rentals because our LLC has a single member (the LLC is an extra named insured on the policies). Now, we are not sure if they'll insure our next rental because once you reach a certain size you're considered more a business than a private investor.

I'd like to know if people who have 10 properties and more, what they do? Cos like I said everybody says get an LLC, but then everything gets complicated and expansive, when like you guys say with umbrella policies and common sense one should be protected. Plus since I use property managers, I don't see how one can hold me responsible for a slip and fall and win more than an umbrella policy covers. The only thing I like about the LLC is that my name does not appear directly with the property, but that's the only advantage I see, every lawyer says a single member LLC can be easily pierce anyways.

I move all of my homes to a Land trust. Every one of them. Yes people can find out what address is on the tax roles, but they do not know who the beneficiary or Trustee is as this is an easy way to hide. I suggest it

When you say you "move" your homes into a "land trust" (which by the way is not an officially recognized entity for holding residential real estate in Texas), are you saying you purchase them in your own name first, then transfer them to your "land trust" after? If so, then so much for your privacy.

Or do you take title in your trust at closing? That's the only way I see to reliably mask ownership, but doesn't Texas require the name of your trustee on the deed? Who do you use? Obviously not yourself, so you have to appoint somebody you really trust (pun intended).

BTW, if you can take title in your corporation or LLC name at closing, that's even better, but it's not easy finding a lender that will allow vesting in that manner. Another benefit of making all cash purchases. :idea:

I think that's a great idea, Bienes. :idea:

There may not be anything wrong with the LLC you formed through an entity "mill", but how do you really know? When you're thinking of getting a used car, don't you take it to a qualified mechanic for a pre-purchase inspection to make sure you're not buying any surprises? :wink:

I have a feeling some people are getting the charging order protection confused with the corporate veil protection. I'm not a lawyer, but from everything I've read, assuming you sign documents correctly, keep records of your decisions, and don't co-mingle funds, I don't see why the SMLLC veil would be any different from the multi-member veil protection.