Author Topic: LLC vs More Umbrella Insurance  (Read 325 times)

hgjjgkj

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LLC vs More Umbrella Insurance
« on: December 27, 2020, 11:03:34 AM »
Have couple of questions about structuring a small duplex.

1) is it possible to hold the property in an LLC but get a personal loan? Interest rate is higher on commercial loans
2) Is it better to hold the property in an LLC or just get an umbrella insurance policy for 2-3M for a 300K 2-4unit?

srad

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Re: LLC vs More Umbrella Insurance
« Reply #1 on: December 29, 2020, 09:56:49 AM »
For financing, no idea about the personal loan. I do know if you have assets someone will lend you money. 

To get the best rates, you can move your duplex out of the LLC into your name to get a normal freddie loan, then move it back into the LLC shortly after it closes. The title company will do the work.  They move it into your name just before the loan closes and if you ask them nice enough, they will even move it back into your LLC after it funds (i just did this).  Does this pierce the corporate veil? i have no idea..  But from what i hear most veils can be pierced with little work.  Which is where your 2nd q comes in.  Insurance.

If you have any rental properties, I'd strongly suggest getting an Umbrella policy regardless of entity structure you use.  Its cheap insurance.  For you, getting a 2 to 3 mil policy seems high for just one 300k rental.  Unless you have a large NW you could get by with just a 1mm policy and increase the amount as you grow your stash and property count.