Author Topic: To put the property in an Multi Member LLC or Not -Miami Condo-  (Read 318 times)

lamachin007

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Hello

I am moving out of state and need to rent out my condo. I wanted to protect myself from Liability, and accidents - Hurricanes for example (The property is in Miami).

So basically I heard that is a good idea to place the property in an Multi Member LLC not a regular LLC, to protect your other assets. I went ahead and got a few quotes and decided to go for it. My idea was to have the condo in the LLC and then also buy "Landlord Insurance" to cover the walls, floors , etc from natural disasters, fire...hurricane..tenants lol, etc.

I went ahead and got a realstate lawyer to create the Multime member LLC and opened a business bank account. I called Geico, MetLife, Allstate, ..and some local insurance companies Estrella Insurance etc. None would sell "Landlord Insurance" for a condo in an LLC.

So great I cannot buy insurance for the condo if it is in an LLC, I wish I had known that before I created the damn LLC.

On top of that the property is paid off, and just having it in a Multimember LLC does not offer enough protection. I would have to get a loan against the property for like $50,000 as a strategy for asset protection. The lawyer and steps are driving me crazy, it seems that you have to no only create a multi member LLC but you then have to implement further strategies for asset protection. My lawyer said welcome to world of asset protection, is not for the faint of heart. I don't see the end of it...

So the decision to take at this point is ,

1- Keep the Multimember LLC and place the condo in it , and take all the risk (No insurance), implement the strategies to protect the asset and due to complicated taxes i guess with Turbox Tax Business.

2- Keep the condo outside on the LLC , buy some landlord insurance and hope you don't get a huge lawsuit someday. Maybe Taxes are easier.

Can you help me decide ?

A-It seems that a lot of people place their properties in LLC and just assume all the risk.
B-Other people don't create an LLC and just assume the risk
C-Other people don't create an LLC and do not buy Landlord Insurance.

Thank You !

SeattleCPA

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Re: To put the property in an Multi Member LLC or Not -Miami Condo-
« Reply #1 on: March 06, 2019, 07:26:20 PM »
A multiple member LLC is just an LLC with multiple owners. Tax law treats it as a partnership...

P.S. A single member LLC is an LLC with a single owner... Tax law treats it as a disregarded entity (so LLC's income and deductions go on its owner's return.)

P.P.S. The owners an LLC may sometimes make an election to treat it as "something else" like a corporation or S corporation.

dandarc

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Re: To put the property in an Multi Member LLC or Not -Miami Condo-
« Reply #2 on: March 06, 2019, 07:48:36 PM »
You're probably asking the wrong questions if the answer is "we won't write insurance on your rental condo in the LLC". Maybe your real estate lawyer can talk to the insurers for you.

The LLC needs to be buying the insurance - the LLC is the owner of the condo once you transfer ownership to it.

Do you really think that people who own rental properties inside of an LLC don't have insurance on the properties? Maybe some, but it is a very, very small number compared to the number of LLC's that have insurance on their properties.