LLC Operating Agreement
When forming an LLC do you need and are any of you putting anything special in the operating agreements or articles of incorporation? I live in Georgia and was wondering if these things are basically boilerplate or are you all adding some special clauses specifically for what we are doing in real estate. We plan on doing everything from flipping to landlording to commercial.
my state farm policies have 500k liability. my non-state farm have 300k - which is the maximum coverage most insurance companies will provide in my area. So I the purchase from SF a policy to raise my non-SF rentals to 500k liability. Then from SF I have a personal umbrella policy, that does not cover my rentals because I have more than 4 rentals. And I have a commercial umbrella policy that covers my rentals. SF will cover rentals in my personal name or my LLC name, since my LLC is a single person LLC.
The downfall of land trusts for rentals is that each landtrust is a seperate entity so you would have to buy extra liability and an umbrella policy on each property.
Owning your rentals in an LLC sounds great, but keeping your LLC truly seperate from your personal entity is difficult, financing a property in your LLC is almost impossible, insurance can be a hassle for an LLC, and if you manage your properties then you can be personally negligent anyway.
Brenda
I require my tenants to purchase a liability policy and name me as an additional insured. They could purchase a little as $25,000 in coverage for or I care as it alleviates any and all nuisance claims.
I also send a copy of the certificate of insurance to my ins company and they usually keep my rate lower than if I did not ask for this coverage from the tenants.
I have a $500K policy for my rentals with a excess rider of $2.5 mill excess the $500K.
Never needed to use it. Yet!
I have clients that even deduct the premiums for the renters insurance from the rents and pay them on one bill...
[addsig]