All Forum Posts by: Saran Mandhadapu

Agree with the top 2 opinions. It looks like your going to get cheap coverage for a cheap policy. I would not want it for any partial claim. Btw 98% of all claims are partial losses.

Hi Derek. Can you please explain what a partial claim and partial loss is? Thanks Saran

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Originally posted by @Jason Bott:

@Saran Mandhadapu If you are a conservative investor, and want the insurance to pay 100% of a fire claim, then this policy will fall short.

The 80% coinsurance provision is in policies for the insurance carriers benefit. In summary, it basically states that you are required to insure your building to value ($550,000), if you do not, they have the right to discount your claim by the % you were underinsured.

If you should have been insuring @ $550,000, but are only insuring $135,000, you are about 75% underinsured. $20,000 claim, you get $5,000. The exact equation and totals shown above will slightly differ, but not by much.

If you are a risk taker & have the financial backing to repair the property yourself, then it can work for you. But you need to be aware of the large risk you are taking on.

To avoid some of this risk, you should increase the property value.

Hope this helps

Thanks everyone for feedback. So should I ask them to change he coinsurance to 100% instead of the current 80%? Can you please help by telling what important changes are needed on this coverage? Appreciate your help, thanks Saran

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Hi,

*** request feedback by 12/28 Wednesday.

What is the minimum insurance coverage that I need to get for a 5 unit multi-family home? I need help. Here is a quote I received.

Building purchase price is $105K, but replacement cost is around 550K

Carrier = United States Liability Insurance Company

Commercial Property Insurance premium = $1,208

Commercial General Liability premium = $500

Total Premium = $1708 per year

Building insurance for $130K limit, 80% coinsurance, $1000 deductible

Business income coverage of $36K

Equipment breakdown coverage with deductible of $1000

Commercial General Liability:

Each occurrence = $1 million

Personal Injury and Advertising Injury = $1 million

Medical expenses = $5K

Damage to premises rented to you = $100K

General aggregate = $2 million

General liability deductible = $0

Please let me know what you think of the above coverage and deductibles?

Appreciate your help

Saran

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Originally posted by @Chris Martin:

Use a real bank.

The "owner" of an account IS the LLC. In every state that I am aware of, a member can be a "person" or an entity and LLCs can have multiple members.

The CapitalOne product you mention is probably looking for authorized signatories as a physical person. The reality is credit is their primary business, and they want something with a FICO score attached to the account.

As a sidebar, as a member of the parent company you can sign for the subsidiary if the subsidiary Operating Agreement recognizes you as a signatory. Someone will need to sign other documents (other than bank documents) of the subsidiary, like SEC 10-K filings, even if there are 0 employees. Under your signature, identify yourself as a member of the parent company.

The obvious question is why are you bothering with this structure since LLCs are pass though entities... unless you have very substantial assets (e.g. >>$10M) like AH4R, which decided instead to create AH4R I LLC, AH4R II LLC, ... seems like a bunch of redundant paperwork (and tax returns, state filings, etc.) for no real benefit.

These are two separate LLC entities with their own EIN numbers. The operating agreement of the subsidiary LLC lists the parent LLC as the sole member with 100% ownership.

Yes, I think I have to try banks with physical locations like Wells Fargo etc. CapitalOne Spark business did not have this facility.

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Originally posted by @Chris Martin:

Use a real bank.

The "owner" of an account IS the LLC. In every state that I am aware of, a member can be a "person" or an entity and LLCs can have multiple members.

I have setup like this since for every new property I purchase, I can form a new LLC and have the parent company be listed as the Sole Member. This way I need to only file one tax return for the parent entity, the subsidiary LLC entities are all pass thru entities.

I purchase properties in PA and PA state does not require the LLC's to file annual report. It only needs to be filed once in every 10 years so it is not a big deal.

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Originally posted by @Jeff Filali:

I have a holding company LLC as well and a few other LLC's underneath as operating companies with the holding co being the "sole member" of the operating LLC's as you've described. My bank did this with no problem. Now they will require your SSN as the "signer" on the bank account, which would be required by every signer on the account, but the account should be listed under the LLC's EIN, not your SSN. Even your holding co account should be under an EIN, not SSN. At least that's the way mine are all set up. They will probably require all the articles of organization and EIN paperwork proving everything is legit.

Yes, I think I have to try banks with physical locations like Wells Fargo etc. CapitalOne Spark business did not have this facility.

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These are two separate LLC entities with their own EIN numbers. The operating agreement of the subsidiary LLC lists the parent LLC as the sole member with 100% ownership.

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Hi,

I have formed a holding/parent LLC company and a subsidiary/operating LLC company which is 100% owned by the holding/parent LLC. The idea is to buy rental property in the name of the subsidiary/operating LLC.

I was able to setup a business bank account for holding/parent LLC company, however when I tried to setup a bank account for the subsidiary/operating LLC company, it is asking for my information for the owner, SSN number etc. I tried to set up a CapitalOne Spark Business account. I called them and they said they cannot open a bank account in such a way that the owner of one bank account is another LLC entity (holding/parent), it has to be a person owning the account.

How do you open a bank account in this situation, which banks have you opened an account with the above setup?

Thanks in advance.

Saran

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Hi,

How do you open a bank account in this situation, which banks have you opened an account with the above setup?

Thanks in advance.

Saran

1 Vote

You can have the purchase agreement include a statement that the buyer reserves the right to buy in personal name or in the name of an entity that the buyer owns.

Then once your offer is accepted and agreement is fully executed, you can form the LLC, get EIN and put an addendum to change the name of the buyer to LLC name. Your realtor does this, it is just a piece of paper that the buyer and seller signs.

****Please note that you cannot use a conventional loan to buy a property in LLC name, you would have to go for commercial loan to have the title in the name of an LLC.****

Thanks...Saran

1 Vote

All Forum Posts by: Saran Mandhadapu

Saran Mandhadapu has started 21 posts and replied 84 times.

Post: 5 unit Property insurance advice

Post: 5 unit Property insurance advice

Post: 5 unit Property insurance advice

Post: How to setup parent and subsidiary business bank accounts?

Post: How to setup parent and subsidiary business bank accounts?

Post: How to setup Holding and Subsidiary LLC bank accounts

Post: How to setup Holding and Subsidiary LLC bank accounts

Post: How to setup parent and subsidiary business bank accounts?

Post: How to setup Holding and Subsidiary LLC bank accounts

Post: To form an LLC during offer process?