Pros & Cons of Using an LLC For Rental Property w/ Matt Faircloth for BiggerPockets

Рет қаралды 180,598

Күн бұрын

There is so much conversation on LLCs. From the basic stuff like what are they and why should we use them to the more complex like which state should we register in and the difference between a Manager Managed LLC versus a Member-Managed.
Today I am going to take a stab at one of the questions that goes around a lot. Should you get a new LLC every time you buy a property? There are pros and cons for doing this and in today's video I go over them in detail. In short form, here are some highlights:
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Pros of using a new LLC every deal:
1. Ownership structure - perhaps you are working with several different owners on a new deal. It makes sense to have a new LLC as it will define the ownership percentages and the roles of each owner.
2. You are working in a new state - this could be argued either way but to me it makes sense to incorporate in the state where your investment property is.
3. You are doing a flip - many investors do a new LLC every flip. This makes sense as it separates that flip from other properties with respect to taxes and liability. More on this in the video.
4. Asset protection - holding each purchase in it's own LLC will compartmentalize each property from the other. If there is a liability claim with one property it won't affect any others held by you. Some would say that this is the main reason to hold each deal individually. Watch the video for a deeper conversation on how valid this is.
Please email us any real estate questions to HelpMe@DeRosaGroup.com and we will answer them on an upcoming episode!
⏰ 🎬 TIME FRAMES🎬 ⏰
00:00 Intro & Recap
00:59 Scenarios for Each LLC
03:12 Reasons FOR LLC for Every Deal
04:58 Asset Protection
06:02 Reasons AGAINST LLC for Every Deal
09:44 Invaluable Reasons FOR LLC
11:00 LLC Protection
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#rentalpropertyLLC #DoIneedAnLLC #HowtogetanLLCforrentalproperty

Пікірлер: 179

@ritadougherty4403 5 жыл бұрын

Wow! This was a great video! I swear my phone spies on me because I just formed an LLC on my first property deal and plan on buying more and just last night I was talking to someone about whether or not to form an LLC for every deal... Suddenly your video popped up on my KZfaq just now! Thank you for your advice... It really answered a lot of questions I had... So thank you once again!!!

@daquanwilkins5650 4 жыл бұрын

Rita Dougherty I’m also thinking about doing exactly what your doing

@edwinvonborstel3405 5 жыл бұрын

Looking for this information all over and it's hits dead on in our particular situation with our rentals we have not gotten llc's but we do have 2 million liability insurance on all of our properties and eventually we'll probably just get a big umbrella that covers all of the properties under a commercial insurance policy thank you so much

@daneandnori 5 жыл бұрын

Thank you for this advice. I always wanted to know the "why" on this topic. thanks for your time.

@killerbadger69 7 жыл бұрын

Very Informative video. Thank you. God bless!

@e2sguy 6 жыл бұрын

This completely changed my opinion on llc holdings . Thank you matt

@legendarycondor 6 жыл бұрын

Just get the LLC folks.

@Mansmokesalot 6 жыл бұрын

Thanks for the free game your giving us appreciate this because you don't have to do this but choose to do so

@pauld3298 4 жыл бұрын

Awesome Matt. Thanks for sharing this valuable knowledge.

@richstevenson1 2 жыл бұрын

Thank you for posting this and outlining the pros and cons. Really appreciate it great video!

@DeRosaGroup 2 жыл бұрын

Thank you!!!

@marcduchamp5512 5 жыл бұрын

Am I getting that this vid is about either you get multiple LLCs VS you get one big umbrella LLC? Also how do you get your existing properties into the LLC structure? Great content BTW!

@kevchiggs 4 жыл бұрын

This was very helpful, thank you for making this video!

@DeRosaGroup 4 жыл бұрын

Thanks! Have you read Matt's book yet? If so, please leave it a review on Amazon! Here's the link: www.amazon.com/review/create-review/?ie=UTF8&channel=glance-detail&asin=B07G4J5TMY

@Evereghalo 5 жыл бұрын

There are a few issues that this overlooks. In particular, each states' laws on piercing the corporate veil. You cant say they cant sue you and take other assets. And every state has different business organizations rules for complying with operating.

@abdulidi733 3 жыл бұрын

Thanks for the educational video. Having insurance is the key.

@DeRosaGroup 3 жыл бұрын

Thanks! To hear more about what we are up to go to www.derosagroup.com!

@antuancaraballo9691 4 жыл бұрын

quite informational, thank you!

@Drmikebuyshomes 7 жыл бұрын

Excellent information.God bless you! Mike P

@DeRosaGroup 7 жыл бұрын

mike pollard same to you!

@555harv 6 жыл бұрын

The llc can have insurance also. Your company may insure all of your llcs. If the plf atty sues the llc and not you personally, that reduces the case worth and promotes settlement at a lower amount.

@tomdoherty3671 7 жыл бұрын

Great info. Thanks for doing these videos

@DeRosaGroup 7 жыл бұрын

Tom Doherty you are welcome thanks for watching!

@Kacz532 7 жыл бұрын

Awesome! Thanks for the video

@DeRosaGroup 7 жыл бұрын

Nick you are welcome!

@CreativeSoul333 3 жыл бұрын

Thank you for the advice!

@DeRosaGroup 3 жыл бұрын

Thanks! Have you read Matt's book yet? If so, please leave it a review on Amazon! Here's the link: www.amazon.com/Raising-Private-Capital-Building-Peoples/dp/1947200984/ref=cm_cr_arp_d_product_top?ie=UTF8

@aevbfly 9 ай бұрын

Good Advice. Thanks Matt! Fortune Builders was recommending filing in Nevada with NCH but, I always thought it was overkill.

@DeRosaGroup 9 ай бұрын

Happy to help!

@johncruz6240 3 жыл бұрын

Love your channel, new subscriber, keep up the excellent work. Very informative channel. Thanks

@DeRosaGroup 3 жыл бұрын

Thanks! You would do well in our Insiders Community. It's direct access to Matt and his team, weekly masterminds, and an inside look at a growing real estate company focused on raising capital for apartment building deals. Join us at www.derosagroup.com/insiders

@ahvaz2000 4 жыл бұрын

Great info, thank you

@DeRosaGroup 4 жыл бұрын

Glad it was helpful!

@jaypowelljr2714 7 жыл бұрын

Thank you Sir

@johnjacobjingleheimerschmi2070 5 жыл бұрын

That's why u make the tenants get their own insurance as well.

@Darvineb86 4 жыл бұрын

Steven Nix elaborate please ?

@jog_gaming 4 жыл бұрын

what are you talking about? the only thing they can get is renters insurance and that covers their personals

@josephzwielich2569 3 жыл бұрын

Make them take out a liability policy and have them name you additional insured as respects to landlord.....your insurance interest.

@Royalslugger 3 жыл бұрын

Nice helpful video. Thank you!

@DeRosaGroup 3 жыл бұрын

Glad it was helpful!

@kevinlj182 6 жыл бұрын

I really enjoyed this video. My brother and I have been talking about investing, and a podcast on BP talked about a group of friends who wrote an agreement and got it notarized. I also read about the LLC. Both of us each own homes separately. We both want to be protected, but it makes sense that insurance would protect us. Maybe if this becomes more than just a one off we will revisit it. Thanks for being thorough.

@DeRosaGroup 6 жыл бұрын

You are welcome!

@jacquelyndowney838 5 жыл бұрын

Derosa Group c

@five-forty3431 4 жыл бұрын

Great informative video!

@aja_6093 3 жыл бұрын

Very informative thank you

@DeRosaGroup 3 жыл бұрын

Thanks we appreciate it!

@maxwellfrempong9623 6 жыл бұрын

Hey Matt, what lenders or recommend (hard money as well) do you work with that will allow you to avoid prepayment penalty? Such as like a hard money lender who have that 5yr prepayment penalty etc ?

@susanli3859 4 жыл бұрын

Thank you so much for your time. This helps me tremendously!!

@DeRosaGroup 4 жыл бұрын

Thanks! To get a big basket of goodies and bonuses PLUS a coupon to join our DeRosa Insiders program for $1 the first month, just text DEROSA to 66866. Go to www.derosagroup.com/insiders to learn more about Insiders.

@LordBlackNephew 6 жыл бұрын

I'm just starting out and I would like to purchase my investment properties under one umbrella, so do I create a S-corp(as the umbrella)then purchase the properties under a llc?

@ciaracorr6015 5 жыл бұрын

If your an investor what is your view on making an LLC as an investor with someone huge like Cardone Capital?

@theboxingfan2173 4 жыл бұрын

So if I open an LLC with 2-3 properties under it and then get a good insurance covering all properties I should be good.

@samschnitzler7106 7 жыл бұрын

very informative! thank you! keep em coming...

@DeRosaGroup 7 жыл бұрын

Sam Schnitzler you bet!!

@MP-nj1qy 5 жыл бұрын

In my experience, the insurance company will step in, but if they have to pay a claim for $20k for example, they won’t want to renew. And it will also be extremely hard to find another company that willing to take your business. So, if the issue can be handled without filling a claim, you might be better off paying for it out of pocket or you might have to sell the property and get out of business after filling that claim.

@phillipgoolsby4886 10 ай бұрын

Great advice! I would love to hear more on your opinion about LLC's on properties in multiple states. Mine are fairly spread out and I've been trying to decide how best to move forward. Any thoughts?

@DeRosaGroup 10 ай бұрын

It depends on how you own them. If they are all in your personal name now I would just try and segment them into LLC by potential tax obligation. Ask your CPA about that

@MitchDurfeeOfficial 4 жыл бұрын

Nice!!

@DeRosaGroup 4 жыл бұрын

Thanks! To hear more about what we are up to go to www.derosagroup.com!

@V8mo50 6 жыл бұрын

Hey matt. Do you recommend buying a multi unit in 2018 with the prices being so high and the talk about another crash? I live in the jersey area as well. Thank you.

@realinvestordata1580 6 жыл бұрын

Great Channel ! #RealEstate #Winning #RealEstateInvesting #RealEstateInvestors

@phillykish 5 жыл бұрын

Hi Matt. What's the difference between Traditional LLC and Series LLC in terms of Real Estate investing. I"m a newbie investor and plan to invest in one state and most likely expand to other states. Thoughts?

@brianrichards7006 5 жыл бұрын

This is all good advice in my opinion. After doing a ton of research on LLC's, I came to the conclusion that plenty of insurance was a simpler method of protecting your assets. No need to incorporate in the Cook Islands or form multiple entities.

@Life_Is_Hilarious 4 жыл бұрын

House Passes Bill Corporate Secrecy H.R. 2513: Corporate Transparency Act of 2019. How would we handle things if this pass the Senate?

@RealEstateRadioTV-SA 3 жыл бұрын

3:23 Pearls of Wisdom right there But watch till the end to see a final twist. Regards South Africa

@DeRosaGroup 2 жыл бұрын

Thanks! Have you read Matt's Book Raising Private Capital yet? If not go to www.biggerpockets.com/store to pick it up and also get a bunch of bonuses including an Ebook on buying apartment buildings!

@ms.demetrism7865 6 жыл бұрын

Hello you mention insurance, is the same as homeowners insurance you have on the property? or separate insurance

@Doitallgp 4 жыл бұрын

Demetris Moore he also mentions general liability insurance, which is advisable if you have a sizable portfolio.

@saranmandhadapu 7 жыл бұрын

Hey Matt, you said you had 3 instances of tenants suing and the general liability insurance covered it. What happens to the insurance policy premium, did it go up substantially immediately or at next renewal? Can you give me some numbers as an example, how much was the yearly policy premium before the event and after the event?

@DeRosaGroup 7 жыл бұрын

Saran Mandhadapu actually the premium did not increase. We have a blanket insurance policy on all our properties so overall a few claims over 8 years is not that bad.

@turtleshellglobal2018 6 жыл бұрын

thanks!

@alexvidu4517 6 жыл бұрын

Many thanks, I've been looking for "texas tax consultants" for a while now, and I think this has helped. Ever heard of - Charlottenon Property Packtrain - (just google it ) ? Ive heard some amazing things about it and my mate got excellent success with it.

@jywll 5 жыл бұрын

Question, do you recommend stripping equity out of you LLC owned properties so the potential max loss would be very low or is this not effective?

@DeRosaGroup 5 жыл бұрын

I've heard of this but think it's more complicated than it's worth. If a lawyer wants to get through that, they will figure it out.

@miguelteran-raful2718 6 жыл бұрын

How bout tax benefits when it come to tax deductions at the end of the year? LLC vs. Regular ownership? Meaning when an individual owns a home they only get to deduct the interest but when an LLC owns the property, you get to writte off the whole amount of the Loan, or a loss?

@skiidzman 5 жыл бұрын

You dont write off the loan persay, but losses and deductions. If you own a rental property under a single person LLC and you make 70k/year working at a job for example - and your rental property gets you $8600/year, you now make $78600/year as the income transfers to your personal taxes. So if you are being taxed 20% at your job, you could essentially modify your W4, tell them you only want 14% taken out of your paycheck and then at the end of the year when you get a fat tax bill saying you owe $6000 put in all the receipts you saved in deductions. You can deduct almost everything... homeowners insurance, contractor fees, property management fees, repairs, travel, there's lots of lists online. But that's basically how you reduce your taxable income and get more money. It won't come in the form of a "credit" on your return, but its pretty easy to pay way less in taxes. But you will need to show the IRS a steady income source from said rental or company. Fake businesses will be a headache and illegal.

@camarojoe1997 4 жыл бұрын

what im understanding on this is to buy your properties into one big LLC and insure the LLC

@DeRosaGroup 4 жыл бұрын

Correct, and the more you buy the more the insurance should be

@zehuazhou3390 3 жыл бұрын

Thank you for explaining this! Is it feasible to get the LLC and also get the insurance? What kind of insurance should I buy for this? Is it called umbrella insurance?

@DeRosaGroup 3 жыл бұрын

Umbrella insurance would cover you for that

@OzyOzySM 6 жыл бұрын

Just wanted to ask very important point I read in some legal zoom and other websites that if you want to create multi LLCs and list them as your subsidiary’s and when you start filing online E file you should sign the article of the organization not by your name only instead put your name then ( as a manager of the holding Company) before you submit the paperwork! Put dose that mean will make the holding company involved in any clime? So better to sign by putting only your name !! Thanks Oz

@DeRosaGroup 6 жыл бұрын

Ozy I would be careful with legal zoom! Your question is for an accountant/attorney. We recorded a video with our accountant on S Corps and I will include link in a moment!

@DeRosaGroup 6 жыл бұрын

Ozy Here is the video we recorded with our Accountant about S Corps- kzfaq.info/get/bejne/d9iFmtGn06vdoo0.html But again I would encourage you to seek professional help of an attorney or accountant! Good luck!!

@nanaernesto2891 2 жыл бұрын

Great video 👍🏻, 1 question: if I have my rental properties under my LLC name, houses insurance need to be under my LLC name or can i do it with my personal name??

@DeRosaGroup 2 жыл бұрын

Insurance needs to be in the name of the company or person who is on the deed of the property

@richardrivera7317 4 жыл бұрын

A Series LLC will solve all issues. Just gotta make sure your state acknowledges them.

@DeRosaGroup 4 жыл бұрын

Thanks for your thoughts, we haven't used them but glad they are working out for you!

@yaboirich 7 жыл бұрын

Hi, I'm doing a deal with two other partners. They have their own LLC already so I am trying to figure out how to proceed. Should I convince them to form another llc with all three of us, or should I form my own and do the deal as a joint llc deal? If the latter, how does that even look? Thanks, Richard

@DeRosaGroup 7 жыл бұрын

yaboirich form a new LLC for all 3 of you. their LLC can be a member representing them if they like. you should definitely have a lawyer help with this also! It's worth the money.

@Gyve796 4 жыл бұрын

Is the insurance you mentioned same as the home owners renters insurance that covered the dwelling, structures etc? Or is this separate insurance on top?

@DeRosaGroup 4 жыл бұрын

Its general liability insurance

@briansmith6297 7 жыл бұрын

Correct me if I'm wrong but a LLC won't show up on your personal credit when pulled up. Also my banker just informed me that they will no longer give me a loan for a single family rental without an LLC.

@DeRosaGroup 7 жыл бұрын

Hey Brian - loans to your LLC don't show on your personal credit because you are not the borrower, the LLC is. They will pull your credit to make sure you are financially responsible and will ask you to personally guarantee the loan. But it doesn't show on your personal credit report as a liability which is a good think as you build your business.

@nickragucci9840 4 жыл бұрын

What’s the link to the video where you interview your CPA ?

@DeRosaGroup 4 жыл бұрын

kzfaq.info/get/bejne/d9iFmtGn06vdoo0.html

@jywll 5 жыл бұрын

I already have one bank account with an LLC name on the account, if I form a new LLC for a new property, any reason I can't accept money into that account or should I form a new bank account for a new LLC? I didn't know if the wrong name might be a way to pierce.

@Goggans 3 жыл бұрын

General business rule is each EIN has it's own account. Having multiple business accounts are okay, especially if you are selected for an IRS audit. Hope this helps ❤

@candyman190 6 жыл бұрын

So if you’re doing business (real estate) in 9 different states? I should in essence have 9 LLC’s? Within the parameters of owners, etc.

@DeRosaGroup 6 жыл бұрын

Hey John - you don't have to open a new LLC when you cross state lines, you just need to register the LLC as a foreign entity in the new state.

@Gierboo 6 жыл бұрын

If you say no to LLC on properties than how can I protect my properties in case something happens?

@ms.demetrism7865 6 жыл бұрын

I believe from the general liability insurance

@jking5772 3 жыл бұрын

Insurance and get umbrella insurance

@georgebaltakianrealestate4189 3 жыл бұрын

Excellent video, thank you so much! Any thoughts on a CA LLC investing in property out of state? As I understand it, I'd pay tax on the rental income to CA no matter what, but would i also have to pay income tax in that state? (TN in this case)

@DeRosaGroup 3 жыл бұрын

Sorry, we don't do any work in CA or TN! A local attorney could help.

@georgebaltakianrealestate4189 3 жыл бұрын

@@DeRosaGroup ok noted, thanks for your response!

@alexwoods1846 3 жыл бұрын

Ok here's a question, I have inherited 2 property's. Both are in my name and currently being rented, should I start a LLC? and if so do I get loans under the LLC for both property's to transfer them to that LLC

@DeRosaGroup 3 жыл бұрын

You can if you want to keep them long term. If so, I would suggest you do a quit claim deed to an LLC, then refinance them in the LLC to pull some cash out.

@nickritter1992 6 жыл бұрын

so which one is best ? sounds like they're both good .....

@DeRosaGroup 6 жыл бұрын

Nick Ritter it depends on what you are holding in it - rentals, use an old. Flips, use an s corp

@vajatin 6 жыл бұрын

Great video! Are you saying use LLC for Rentals? It appears to be typo.

@jbilardello 5 жыл бұрын

My broker said if u get a mortgage through an llc and u personally have to sign the loan you basically just commingled your name with the entity and it doesn’t really protect you anymore. Do you or anyone on here have more info on this ?

@FlowtnWitWalden 5 жыл бұрын

Is your broker an attorney? I believe you would sign as an officer of the LLC, but best to consult an attorney.

@jonathanallen274 6 жыл бұрын

😀😀 *A beautiful 2/3BKH apartment in Taruchaya Residency jaipur* 😀🙌😀 #BuyApartmentsAtJaipur 😊😊🙌

@johnnybates7580 4 жыл бұрын

My clients form an llc for every deal. They are large projects that can take decades to complete.

@DeRosaGroup 3 жыл бұрын

In that case an LLC per deal would make sense!

@MrShonuff85 3 жыл бұрын

So if your buying multiple properties in different states can you put them under one LLC?

@DeRosaGroup 3 жыл бұрын

Sure, you are ok to do that but may want to do an llc per state for tax purposes

@guzman9011 6 жыл бұрын

how do you get around banks that dont want to give you a mortgage in a LLC?

@DeRosaGroup 6 жыл бұрын

Mr Guzman there is no getting around them, you just need to find another bank. Try working with a small community bank with branches near the property

@vooodooochild2003 7 жыл бұрын

I would like to know if you like landtrusts on every property and if not, why?

@DeRosaGroup 7 жыл бұрын

greenish thumb I have used them on short term deals like flips or wholesaler. Not rentals though, because it's very hard to open a checking account for the land trust without putting it on the radar which negates most of the trust's benefits.

@jirensentry7609 7 жыл бұрын

So how many properties cover the max $2 million? I ask because I see a reason to compartmentalize the properties by that max. If 10 properties cover $2 million and I have 80 properties, it seems well for me to set LLCs for each set of 10 in order to have total max coverage. Does that make sense? Costs more in forming the LLCs, but for that max amount of insurance it seems reasonable.

@northguard82llc15 6 жыл бұрын

I would look at each LLC as a small fee or an insurance for asset protection

@salas231141 4 жыл бұрын

My house is paid off its worth about 250k and I want to move to another country and live off my rent I want to use a rental property manager should I get an LLC

@DeRosaGroup 4 жыл бұрын

I still believe an LLC would benefit, and even more so if you are living over seas.

@chaseourlove2249 6 жыл бұрын

Hey Matt, I actually did fall in my apartment, due to our carpet. It was horrible, I had to have reconstructive surgery on my knee. It is the carpet. The softer, plush like carpet. It was horrible. It does happen.

@damis2372 2 жыл бұрын

I am 53 years old. I am interested in investing in multi-family rental property. I just created an LLC. Taking a loan using an LLC is expensive. Very high interest rates. I have $2 million in retirement. Should I take the loan as personal loan at 3.6% or use my LLC to get the loan at 5.6%. I appreciate your recommendations.

@DeRosaGroup 2 жыл бұрын

Interesting. You really can't loan to your LLC from your retirement account as the IRS would see that as a withdrawl and charge you a penalty. You should invest your IRA into other passive assets and find another source of loan for your LLC. Hope that helps!

@damis2372 2 жыл бұрын

@@DeRosaGroup Not planning to do that. My question was if I buy a residential property using a personal loan, I can be sued by tenant and my retirement would not be protected against lawsuits.

@mudderdrummer 4 жыл бұрын

Isnt getting an LLC for each property a risk of a judge overruling the separation between projects? I heard they are cracking down more on this because the idea of LLC is to separate your personaI property from your business. If the LLCs are very similar that could be percieved to be the same business, a judge can open up your IiabiIity to your other assets under the different LLCs

@DeRosaGroup 4 жыл бұрын

Good point, although we've never been an advocate of holding each property in it's own LLC. From what you're saying, the courts may be able to see through that anyway which removes the perceived protection also.

@mudderdrummer 4 жыл бұрын

@@DeRosaGroup It is caIIed "piercing the corporate vail" www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html

@slag5150 5 жыл бұрын

Hi Matt. I’m in CA and have 9 units in the Midwest. I have an umbrella policy of 4m and great general insurance. I am the sole owner (no partners) do I need an LLC at all???

@DeRosaGroup 5 жыл бұрын

You are likely covered, for now. If you buy more rentals you should move to an llc

@slag5150 5 жыл бұрын

Derosa Group thank you Matt. I very much thank you for taking the time to get back with me.

@sushilrajbanshi2697 5 жыл бұрын

My rental house is in the trust between me and my wife. do i have to move it to LLC? what do i have to do to move the property in trust to LLC? Should i also have my primary property in LLC? if yes, Same LLC as my rental property or Separate?

@MrRainrunner 5 жыл бұрын

I'm in that situation too

@awurammaparry8073 7 жыл бұрын

Hi Mike, l am very much interested in real estate and l would really appreciate it if you would guide me along this journey. l am a newbie and don't have much knowledge about what l am doing. l attended one of your meeting in Princeton last Thursday but did not get the chance to speak to you. l would like to talk to you in person. Take care.

@DeRosaGroup 7 жыл бұрын

Awuramma Parry keep coming to those meetings!

@hijinks21 5 жыл бұрын

Judges can see right through LLCs if you are using them solely for protection

@sebastianricci6517 3 жыл бұрын

not always

@FilomenaDapaz 6 жыл бұрын

well the use of LLC is to get you more tax Benefits . the umbrella insurance dont gives u any tax benefits

@Stefan-lt8ts 5 жыл бұрын

it ought to cut your taxable income

@cameronfeldhaus3435 5 жыл бұрын

Filomena I agree!

@dbigtime10bt 5 жыл бұрын

Plus, if set up correctly you can anonymity from noisy people!

@BossChronicles 6 жыл бұрын

Whats the best business entity for real estate investing ? LLC?

@DeRosaGroup 6 жыл бұрын

Yes we use LLCs the most. However we also use S Corps and LPs as well. It is best to get with an accountant/lawyer to help advise you on these matters. Here is a video Matt recorded with his accountant where they discuss S Corps: kzfaq.info/get/bejne/d9iFmtGn06vdoo0.html

@tiffanycarson6594 5 жыл бұрын

My landlord is on BS homes galore llc is in China, Michigan I don't know where his office at but I'm doing an investigation on him

@dmack5503 Жыл бұрын

Why? 🤡🤡🤡

@TheCRHKing 6 жыл бұрын

“States in the union of the country of the United States”

@DeRosaGroup 6 жыл бұрын

TheCRHKing nice catch. ;-)

@FlowtnWitWalden 5 жыл бұрын

Insurance may cover property/tenant related damages... but if YOU personally or someone in your family is the proximate cause of harm to another party, i.e., you hit and kill a pedestrian on your way home from the supermarket. That's what llc's and non-charging order holding companies are for. So when the suing attorney comes after your personal assets... your rental properties are not available - they're protected by an impenetrable veil. I think, imho.

@rsd714 4 жыл бұрын

FlowtnWitWalden Yes. I know someone who lost his real estate portfolio after an auto incident having nothing to do with his rentals and a woman who lost her house after her son got into trouble.

@mattmiller884 4 жыл бұрын

Umbrella policy. Done

@pecacuprija 7 жыл бұрын

Awesome video Mr Matt, thank you! How do you pull off LLC for every flip, im sure you're not gonna open an LLC before your offer is accepted, but that means the name on the offer is not the new LLC? Thank you

@DeRosaGroup 7 жыл бұрын

Peter Milic when I do that I name the LLC the address of the flip, so 123 main LLC owns and flips 123 main.

@pecacuprija 7 жыл бұрын

But you don't form that LLC until your offer is accepted correct? So what name do you put on the offer? I'm looking at a property I want to flip, I want to put an offer, but I don't want to form an LLC before the offer is accepted. So I should put my name? Not sure if the seller will allow me to put LLC as the buyer if it's my name on the offer?

@DeRosaGroup 7 жыл бұрын

Peter Milic you can check to see if the name is available but I have never had a problem. street names with the numbers are a pretty obscure name. you can also put clause in your offer saying that you can change the name of the buyer before closing as long as the new entity is owned by the same individual. Don't get hung up on this, make the offer today and close that flip deal, lol!

@user-kz3sb8iv5s 4 жыл бұрын

it is very expensive to form an new LLC for every flip I do in my state, this is just not feasible

@wave7707 7 жыл бұрын

What do you think about this ? $200k worth of property per LLC A solid insurance for every property Requirement for every tenant to have renters insurance ? I also hear people talking about having a separate bank account for every property ? that seems so confusing can you explain the whole bank account for every property idea because it seems like a joke. I dont understand the reasoning behind it.

@DeRosaGroup 7 жыл бұрын

wave no reason for the $200k cap on property value. We require renters insurance for our tenants also, good move there. no reason for separate bank accounts. I couldn't imagine the headache you would have as you grow with that plan!

@marcduchamp5512 5 жыл бұрын

Separate bank accounts for better accounting purposes and gives you a better picture how much each one of the property is bringing you the cash flow.

@infamist 3 жыл бұрын

What I would like to know is, if I create an LLC is it required that I put my rental properties under an LLC for me to claim it as a business? Meaning I own 3 rental properties that I might or might not be able to transfer into an LLC because as every video says the lender might not allow it for X reasons and if I do they might recall the loan. I want my rental income to be recognized as business income and I want to be able to be free to move my business anywhere I want and have the bank recognize that also for future loan qualification. Can I still have an LLC to use in order to process the way I do my taxes regardless of whether my rental properties are transferred over to that LLC on title?

@DeRosaGroup 3 жыл бұрын

You really don't need the LLC to show up as business income on a tax return because the LLC is a pass through entity, meaning anything the llc makes just gets passed through to the owner's return. The LLC is more of a liability and asset protection piece versus something that gives you business or tax leverage.

@jayc4715 4 жыл бұрын

LLC. Is bad if you have to take a tenant to court for eviction..youll need to hire an attorney

@rjreed1 6 жыл бұрын

every llc gets its respective tax breaks. if you are using properties for passive income you want to use llc.

@chrisc9389 4 жыл бұрын

not true

@fluent_In_finance 4 жыл бұрын

If someone slip & fall y is that someone else's fault? That's one of the things I can't stand about this country..ppl anyways looking for a quick check. They ought to make it harder for ppl to sue the same way they make immigration & welfare a challenge.

@mr555harv 3 жыл бұрын

Hi Mr. Derosa, If the law case is simple, you would be correct. The plaintiff attorney will generally just go after the insurance company and the attorney for your insurance company will settle the case. However, if there is some egregious issue, for example, long term deferred maintenance that you should have taken care of, but sort of let fall through the cracks -- well, if you have significant personal assets, the attorney will sue you for punitive damages in addition to the actual damages suffered by the plaintiff. In the punitive damages phase of the trial you will need to bring forward your personal assets. So, your video should say that insurance is enough if you also have a regular and good maintenance schedule insuring that your property is safe. If something bad happens, you can then point to the maintenance schedule so that you will not appear to be a sloppy and bad landlord for allowing the existence of dangerous conditions.

@DeRosaGroup 3 жыл бұрын

Great points.

@paulross2979 4 жыл бұрын

I wouldn't follow this guys advice. 1. Flipping in an LLC that isn't owned by a Corp will flag you as a dealer and cost you higher taxes and prevent you from taking advantages when your holding properties. 2, Never rely on Insurance to protect your Property from lawsuits. Not all lawyers are lazy, some want big returns and go after your LLC and your personal property. Consult an Business Attorney before following this guys advice.

@DeRosaGroup 4 жыл бұрын

Thanks for your thoughts!

@carolyntierney7091 3 жыл бұрын

Could you please define an LLC up front? Without that, much of your presentation is beyond the comprehension of the layperson.

@DeRosaGroup 3 жыл бұрын

Great tip!

@paystar3436 5 жыл бұрын

Do not believe in INSURANCE as is very, very expensive !!! Also how is it that your INSURANCE even pays out without a legal action ??? tHEY are not in the business of paying tenants , lawyers, or anyone including the insurance holder. This guy is bogus information and must work for the insurance companies !!! In order for an insurance policy to pay out there must be a LOSS OF money to YOU the LANDLORD by the legal action ... da' this guy is not speaking reality ....

@MrRainrunner 5 жыл бұрын

I don't think you listened to him very carefully. The way I understood it it was like this: He said a lawyer sent him a notice that they (tenant and the lawyer) would sue him and wanted him, as landlord, to fwd that to his insurance co..... He said NO, if you want money, go ahead and sue me, the lawyer dropped it as it was a bogus claim. Insurance co's DO suck but, in todays society, Insurance is a nec. evil...which Ins. companies EXPLOIT. IMO, They need to be more heavily regulated.

@bobm7325 4 жыл бұрын

Insurance companies will pay quickly. I was in a car accident that was 100% not my fault it was easily proven but my insurance paid because it was quicker than battling it out.