All Forum Posts by: Kon Zel

@Jeff Bisgier It depends on your risk tolerance. Plus...What is the value of the property? Do you get major cash flow from it that you want to protect? Did you implement all the other required asset protection steps before upgrading to asset protection structures? Do you self manage? Do you have other assets that require protection (for example, in some states, the main residence itself has homestead protection)?

Here is a diagram to help you in your quest:

From your question details, I would not look into LLC yet. Make sure you have proper insurance and umbrella insurance, proper property maintenance (up to code, etc.) and proper property management. Then work on getting some more rentals (maybe even get an asset based line of credit using this paid off property - the note itself will act as a deterrent) and build more wealth before spending time and resources on LLC.

Here is another "rule" - the "2% ASSPRO or CYA rule" - the cost of setting up and maintaining your asset protection should be less than 2% of equity you are trying to protect. Let's say, it costs you 1.5K to get your structures in place (holding LLC or Series-LLC, with or without land trusts, with or without separate operations LLC) and 0.5K per year (for maintaining the LLC properly, bookkeeping, lawyer and CPA, etc.) for a total of 2K. You should have 100K or more in equity to protect before it makes sense to spend that money - compare that with how much you spend in annual insurance for the same property/equity.

Hello @Ed Rosenberg  our company has recently sold a 58 unit, and a 32 unit apartment complex. We also have a 22 unit apartment complex listed for sale right now that might meet your buying criteria. If you would like I would be happy to visit with you when you are in town and discuss with you our experience with multifamilies in Memphis. The owner of our company just bought within the last year a 120 unit, a 60 unit and a 40 unit apartment complexes. Which our in-house property management company manages along with 1750 units in total. 

Are you required by your state to keep security deposits in cash?  If so, you might opt for the higher interest rate.  Otherwise I would avoid holding more cash than you need to sustain your operations.

Interesting strategy as I usually go the other way.