Looking to get a 6 family investment property under an LLC but also considering getting umbrella insurance. Any opintions? Should umbrella insurance be under the name of LLC or the person? Also what is a good amount? Looks like its 1 million and up.
@Peter Fokas Generally in $1m increments. Personally, I would base the amount of insurance on how much you have in equity. If you have little equity and no job, $1m is more than enough. If you have $1m in equity and a $200k/year job, I might get $3-4m. Basically, you want to incentivize anyone who would sue you to accept the limits on the insurance and not continue to come after you personally.
I put my umbrella on me personally.
I would love to read more feedback on this one. I have one SFR and should be closing my second next month. Everything I have read suggests LLC, but wonder what the BP community thinks?
I currently have a subchapter S corporation and I am in a second with another person. I am also in 2 LLCs with others. In one I do no work myself, it has a $500,000 policy. In the one I do work myself on nearly every day, I have an added 2 million dollar umbrella. Liability can vary depending on what type of activities you do. Passive activity and active participation make a huge difference.
I have $2mil coverage for each of my LLCs and I am increasing it to $3 mil mainly because I purchase my properties all cash, so having additional $1 mil gives me peace of mind for not a lot of incremental cost.
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