- Joined
- Oct 3, 2007
- Messages
- 1,743
Rep Bank
$1,255
$1,255
User Power: 28%
I've got a couple questions about some insurance...I'll present a scenario that might better explain my question.
Real estate portfolio consists of 15+ residential properties, 7 to 8 of which are adjoining (one square block). The other 8 or so are in a different location a few miles away. In Florida, adjoining properties warrant a commercial insurance policy. This of course is a lot more costly than a typical individual residential policy. This is also only in effect if all of the above properties are held in the same name (ownership).
My questions is this.
If these properties are being held by an individual, there are obvious advantages for protection/taxes by holding them in an LLC, right? If an LLC were formed to buy and hold, all properties would immediately be viewed as one entity. This would also call for a commercial policy that is triple the current insurance cost. The issue at hand is the advantages will cost more in insurance than they are worth, due to mandatory laws. It seems like it might be best to open several entities to hold the properties in small groups. The numbers just don't make sense, i.e. it might cause 15 cashflowing properties to come up negative for many years. Some may say they were bought wrong. I don't agree with that, as insurance rates in Florida have gone nuts due to hurricanes, not insufficient due dilligence on buying right.
Ideas on how to best deal with this situation? It seems like I'm missing something here. If this is to vague, I can provide more details, I was just trying to make it short.
Real estate portfolio consists of 15+ residential properties, 7 to 8 of which are adjoining (one square block). The other 8 or so are in a different location a few miles away. In Florida, adjoining properties warrant a commercial insurance policy. This of course is a lot more costly than a typical individual residential policy. This is also only in effect if all of the above properties are held in the same name (ownership).
My questions is this.
If these properties are being held by an individual, there are obvious advantages for protection/taxes by holding them in an LLC, right? If an LLC were formed to buy and hold, all properties would immediately be viewed as one entity. This would also call for a commercial policy that is triple the current insurance cost. The issue at hand is the advantages will cost more in insurance than they are worth, due to mandatory laws. It seems like it might be best to open several entities to hold the properties in small groups. The numbers just don't make sense, i.e. it might cause 15 cashflowing properties to come up negative for many years. Some may say they were bought wrong. I don't agree with that, as insurance rates in Florida have gone nuts due to hurricanes, not insufficient due dilligence on buying right.
Ideas on how to best deal with this situation? It seems like I'm missing something here. If this is to vague, I can provide more details, I was just trying to make it short.
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today