With the fallout of the real estate market the number of foreclosure sales is increasing dramatically. Many of those purchases are being made with the intent of renting the property rather than for owner occupancy.
LLCs are today’s number one choice for holding title to real estate. Owning either residential or commercial real estate can subject you to significant risk of a lawsuit. As we all know, accidents can happen any time. If someone gets seriously hurt on your property, you may find yourself being sued for damages.
One of the most common mistakes people make is assuming that since they have insurance that they are protected. Sometimes judgments can exceed the insurance coverage, or in some cases the insurance is denied. It’s important that you read your insurance policy thoroughly and understand the limitations.
The LLC is designed to protect your personal assets in the event of a lawsuit. You want to make sure that in the event of a lawsuit that the LLC is the defendant and not you personally.
Here are some things to keep in mind:
If you haven’t done so already, you may want to consider forming an LLC to hold title to your investment real estate. Remember to “not carry all of your eggs in one basket”.
You must sign a deed conveying the real estate to the LLC and record the deed in the county in which the property is located if you wish to transfer the property.
Make sure you are adequately covered with your insurance policy and that the LLC shows as the insured. Remember, the LLC is not you and you’re not it.
If you transfer the property into an LLC but you are making improvements on the property and an injury arises because of the work, you could be sued personally. You may want to hire a licensed contractor for things such as construction repairs, electrical work or plumbing, etc.
If you do hire someone to do significant repairs on your property, be sure to check them out thoroughly beforehand.
For information and assistance regarding forming an LLC, give us a call toll free at (888) 274-1130.
Find out more about American Corporate Enterprises by visiting our website at https://americancorpenterprises.com. At American Corporate Enterprises, Inc., we have the expertise to handle all your incorporation needs! Contact us Toll free (888) 274-1130 or (775) 884-9380 today.
Toll free (888) 274-1130 or (775)884-9380 today and visit our website at www.americancorpenterprises.com.