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New Jersey Real Estate Q&A Discussion Forum

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Monica Chan
  • Attorney
  • New York, NY
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Pros and Cons of a LLC vs umbrella insurance for rental property

Monica Chan
  • Attorney
  • New York, NY
Posted Jul 18 2018, 18:07
Hi everyone, I’m a newbie to Bigger Pockets and am excited to learn from and to know this community of knowledgeable RE investors! So I’m just dipping my toe in real estate investing and am about to make an offer on my first multi-family in Jersey City. The fundamentals of the place look good, and I plan to rent both units out (I live in my own apartment). I would like to set up an LLC to purchase this property but was told by my NJ lender that the loan would be considered a commercial loan, 30-year conventional isn’t an option, and the interest rate would be much higher. He recommended that I buy an umbrella policy instead. What are your thoughts on the pros and cons of buying with a LLC vs. buying individually with an umbrella policy? Any advice or tips appreciated, thanks y’all!

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