All Forum Posts by: Tony T.

You need liability coverage either way, do not rely on a closely held LLC to shield you from liability especially if you manage the property. Starting a company should be for business reasons, the limited liability aspect is usually misunderstood and should not be the primary reason to form any entity. A popular school of thought but you can do just as well and make life easier holding properties personally with a good insurance policy. :)

How does having a property manager shield you from lawsuits (if at all)? Are there examples of things that a PM would liable for versus the owner? Or is the owner on the hook for everything that a tenant might sue for regardless of whether you have a PM or not?

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Thank you ALL for the well thought out responses...as a new BP member (I joined last night!)...I am completely overwhelmed by the people on this board (in a great way! = ))

To provide a little more detail...

I own 7 SFH's and have little interest in forming a business (as I have a day job that I'm focused on)...however, I'm primarily interested in asset protection and am hoping my umbrella personal liability insurance is enough to accomplish this.

Yes, in CA, there is a $800 annual LLC fee that we have to pay. This isn't the main reason I'm shying away...I loath tax time and would dread having to do taxes twice.

I'm very new to this whole scene and appreciate this board as I can already see its benefits.

Looking forward to learning and contributing!

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If the purpose of an LLC is to protect my personal assets, can I forgo setting up an LLC and instead purchase personal liability insurance? Does anyone know the pros and cons of doing each? I honestly a little intimidated by the notion of an LLC and what it involves.

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I've got about $300k to spend on a home that offers capital appreciation along with some decent rental income (not expecting it to necessarily cash flow).

Does it make sense to buy a larger house in the suburbs or a smaller home (or townhouse/condo) in the city? Let's say both options would yield the SAME capital appreciation. Does it make sense to buy a smaller home or condo?? My assumption is that with a small home or condo...there are fewer potential repairs compared to a large suburban home. Does this hold water? Or should I be thinking beyond this?

Thanks for helping me think through this.

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Originally posted by @Dean Letfus:

Sean McKelvey you are right about your cake. Memphis is hard to exit to be frank. Especially some of the turnkey players sell their deals based on cheap financing and people are paying as much as 20 grand over retail based on leveraged cash flow. I am stunned by some investors ignorance in this regard. You have to know this market pretty well and buy well to have an exit strategy. Once you get into the high b's and low a grade areas things change as there is definitely a rebounding home owner market developing here. But the traditional "cash flow play" can be like a tattoo here, you may have it for life :-)

Dean, thanks for this post...I went to Memphis last year and after a weekend, bought 4 homes from turnkey providers in Memphis without really thinking about an exit strategy. Don't get me wrong, I'm not trying to exit, but if I were...can I assume that by purchasing from a turnkey provider that I significantly "overpaid" for the property initially and therefore I've got essentially got a "tattoo" as you put it?

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Hi Everyone! My name is Tony and I got bit with the real estate bug last year.

I currently have investment properties that are rented out split between the following:

1 in Summerlin, NV

2 in Collierville, TN

4 in Memphis, TN

They're pretty much all single families and are all rented out. Since I'm out of state with all my rentals, I definitely utilize property managers and after year one, I have to say it's been a good experience.

At this point, since most of my properties are in Tennessee where it's all about steady cash flow...at this point, I'm thinking about going to a market with slightly more room for appreciation. I'm primarily thinking about either the Dallas/Fort Worth area or Orlando. If you were to spend $300k (with say $75k down), what do you think of the aforementioned markets?

Thanks for any thoughts you may have...I'm looking forward to being a part of the community!

Tony

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All Forum Posts by: Tony T.

Tony T. has started 3 posts and replied 16 times.

Post: Do I have to set up an LLC?

Post: Do I have to set up an LLC?

Post: Do I have to set up an LLC?

Post: How to spend $300k

Post: Is Memphis still a good market for SFR?

Post: New in the San Francisco Bay Area