LLCs: is an operating company enough?

[Paul Ellerbusch]

I am a new real estate investor and I am closing on my first duplex in Milwaukee, WI this month. I took out a conventional mortgage (30yr/3.125%) and the property is will be held in my own name. I am trying to incorporate an LLC into my real estate investing activities to provide added protection. I plan on using a buy and hold strategy for my first duplex.

So, if I use my LLC as an operating company but keep the property in my own name, does the LLC provide any personal protection? I plan on renting the property to tenants through the operating, LLC (my name will not appear on the lease contract). Also, I will pay for repairs and all other expenses, and funnel rent payments through the LLC bank account as to not co-mingle funds.

I have read in-depth about using holding companies, multiple LLCs, trusts, crazy expensive liability insurance policies, etc. but wanted to explore this route because it seems less-complex and more cost efficient. Basically my question is ... if one of my tenants slips and falls and sues, will they be suing the operating LLC (listed on the lease) or can the tenant skip over the LLC and come for me, the property owner, and my personal assets?

Thanks in advance!

[Christopher Smith]

Umbrella insurance is usually dirt cheap not crazy expensive. I cover all my activities for around 300. Probably more money has been wasted on LLCs than any other single expenditure relating to asset protection.