All Forum Posts by: Nathan Frost

@Nathan Frost per the attachment, $300k Liability is the minimum required.  Are you saying your below that amount?  Most insurance carriers don't go lower than $300k.  Going from $300k-$1M is usually $20 per year, per building.

I recommend a minimum of $1M on 1-2 units.  We haven't had a client suit exceed $1M, but have had several exceed $300k. 

I am not an expert but in my case the umbrella is designed to protect me and my net worth. Forget the LLC, or no LLC. If I get sued I am covered to the extent of my net worth whether someone slips and falls, or I run them over with my truck.

@Nathan Frost per the attachment, $300k Liability is the minimum required.  Are you saying your below that amount?  Most insurance carriers don't go lower than $300k.  Going from $300k-$1M is usually $20 per year, per building.

I recommend a minimum of $1M on 1-2 units.  We haven't had a client suit exceed $1M, but have had several exceed $300k. 

$800 a year to maintain, plus the initial time and cost of setting them up, plus separate bank accounts, etc.

People set up an LLC to separate business assets and protect their private property from a lawsuit. How many Landlords do you know that have been sued for such an amount that insurance didn't cover it, they lost all the equity in their investment property, and then they lost private property? I'll wait right here while you generate that list...

Done? Is it blank? Of course it is.

Insurance companies are in the business of making money, not paying it out. They cover you for $350,000 or $500,000 because they know they'll never pay that out. Even if you were sued for $1 million, it's likely going to be settled out of court for a much smaller amount unless you were egregiously evil or blatantly violating the law.

Don't make your life so complicated. You can put all the properties under one LLC (or no LLC) and buy an umbrella insurance policy of $2 million and things will be easier and cheaper and still protected.

Ask your attorney. For my personal portfolio we have an umbrella policy for my rentals. We viewed an LLC as overkill and I would rather have insurance and much lower loan rates

@Nathan Frost thanks for the post.  Always good to hear from a fellow Texan.  I would HIGHLY recommend getting with someone here locally if you have found a property that would work as a "Subject To" transaction.  There are several things that need to occur in that process.  "Sub To" deals are hard to find...and many that are "found" end up being good deals, but not as "sub to" deals.  So working with someone that can show the ropes first hand will help you find more deals faster.

I would also state that we don't provide ANY earnest money on 99% of the "sub to" deals that are executed on. Now, if you want some local advice, I would suggest speaking to Roger Paschal.  He wrote a great book on Subject To (of which, Pace Morby wrote the foreword on) and he's right here in Texas. This is the website to the book: https://subject2book.com/  Bigger Pockets doesn't let us post people's phone numbers but I think you can reach out to him there.

Anyway, I hope that helps in some way.

The cost of capital getting a loan secured by real estate will be extremely high on $15k.  Title work and closing costs, recording fees, etc.  

I'd save organically or get a signature loan or title (vehicle) loan from my bank. Keep RE out of it @Nathan Frost