All Forum Posts by: Jenn A.

One other important note is traditional lenders won't loan to LLC's so refinancing is then out of the question. The possibility of a claim exceeding our umbrella is very remote. Lawyers make great money for the time spent prepping your LLC. I'd make sure your advice comes from the most successful investors you can find.

That would be nice, but CA doesn't allow out of state LLC's. Greedy buggers....

I thought the same thing when I first heard that. But the more I thought about it the more it made sense. I may rethink it once our net worth gets higher. He also explained the first thing an attorney does is evaluate the 'target', being you. IF you have a big umbrella and IF he has a reasonable case and IF you have properties relatively leveraged out he will go for your insurance co. first. Those are big IF's and mostly within my ability to control. Another thing is we plan to exit the CA market in the next few years. We also own in TN. Set up is a 2 page document $300 and no annual. Not sure about the two states we are going into next as we are still in the due diligence stages in those areas right now. 

So I don't know any of the details of your situation, so maybe this is helpful for you or maybe not. We are invested in a few states and on the advice of a CA attorney we are foregoing the LLC for CA. We have 2 properties here and an insurance policy with a hefty umbrella. LLC setup in CA is about $1200 plus an $800 annual fee. The Attorney advised against because we have a good system in place to maintain our properties so we don't allow room for gross negligence, we have property management with E&O insurance as an extra layer of defense and had our lease agreement reviewed by an attorney and then our own insurance umbrella to catch everything else. Other states cost about $300 to setup and low or no annual. CA is ridiculous