Best Way To Set Up Investments?
How should one set up their properties? Should you consider it a business and keep the expenses separate, or a business? Whats the best way to protect rental properties, LLC?
How should one set up their properties? Should you consider it a business and keep the expenses separate, or a business? Whats the best way to protect rental properties, LLC?
$1,000,000.00 is pocket change compared with some of the judgments being awarded in personal injury cases. This site (http://www.assetprotection7.com/) documents a $28,000,000.00 award in California where the tenant was shot and killed in a public alley outside a rental property by someone the Landlord didn’t even know. $3m-5,000,000.00 umbrella policies will be grossly inadequate in such a case.
I think you need both umbrella policy and LLC. Umbrella covers many aspects but not all.
Come on fourm folks, input plzzzzz.
Thanks !!
You may want to ask if the lender requires seasoning for the down payment portion. I have had a commercial lender that does not, and I am currently speaking with one that does.
They may also require you to have 3-6 months worth of cash at hand to cover any problems. Extensive repairs, massive vacancies, etc.
You must show that you are taking some personal risk, otherwise they might offer 100% financing similar to a residence.
Take care,
[addsig]
Thanks SC, now I know what seasoning means.
One of the first questions that we ask a lender is wether or not they will allow Seller Carry Back or if we need proof of funds of our own to make the deal work. We personally rely on the sellers carrying at least 10 to 15% in the form of a second mortgage to make the deal work. And we never have a large amount of cash sitting in our business account. Its better to ask these question during your first call to any lender. If they do not allow it, politely say "Thank You" and move on to the next lender. By taking chances, you risk loosing precise time and possibly also a great deal. Just my opinion.
If you mean earnest or good faith money, there is likely no minimum. I have never heard of a purchase agreement being overturned because of insufficient earnest money. If a seller asks for more than I want to put up, I tell them that I have several offers out there and would run out of cash if they were at what seller wants for earnest money. I did buy a FSBO in NC many years ago with no earnest money.
thanks for your reply.Just wanted to make sure I was not breaking any laws here.