Just curious if most people here are doing things entirely in their name or if most have setup LLCs and corps to protect themselves. Seems that doing everything in your own name would be foolish but I'm curious how many are doing it. How do you have your company setup- corp, LLC, sole-prop?
Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
20y
I've pretty much always operated under my own name. I did form some LLCs and put my properties into them, 3 ppties per LLC, but I owned them free and clear. Having a corp or a LLC is NO PROTECTION if you do lots of things wrong. Doing things the right way is the best protection.
I've been at this almost 30 years, bought and sold between 80 and 100 ppties and owned as many as 16 rentals at one time. I've NEVER been sued, never had any damage that I could call "intentionally trashing" on the part of a tenant.
I just worry about the people that sue just to make a quick buck. Also worry about the prospect of an injury on a rental property that could get me sued for a good deal of money. What if someone falls out the window and due to the fall is paralyzed? They could potentially sue the pants off you even though you've always done right by them and treated them right.
Loveland, CO · Member since 2008 · 1k+ posts · 123 votes
20y
OK, first off those people barely exist, and the ones that do always make sure that they're suing someone with really deep pockets, large retailers, hotel chains etc. 99.9% of stories that you hear about outlandish lawsuits are complete BS, dreamed up by polititicians trying to pass "lawsuit reform" laws that are much more likely to HARM YOU than to hurt you.
That's why I've always carried an umbrella policy, currently at $1 million, formerly at $5 million, I pay about $175/year for that in TX, probably cheaper in states where insurance is regulated!
Often, how you treated them doesn't matter. If someone gets hurt, they're going to file with their insurer, if their insurer doesn't want to pay (and they never do!), that company will sue you, and thereby your insurer.
A very tiny percentage of injury lawsuits in the US are individuals suing other individuals. IIRC it's way more than 99.9% business to business, almost always it's insurance companies. Which is why insurance companies pay such large sums to own (or rent) their state legislators and US congressmen!
Wholesaler · Charleston, SC · Member since 2008 · 172 posts · 5 votes
19y
Never do it in your name. If you do & you get sue. Everything else in your name can be held to give away to the person that's suing you. Put each investment property under one LLC. That way you are very protected.