When Geico disallows more than 4 rentals, I have considered LLC for liability protection and possible bonus 15% tax rate. After much research, for my situation, no advantage, YMMV. An umbrella policy + landlord policy for each rental suffices. Only need to change from Geico to USLI for umbrella policy.
Plus, umbrella is broader coverage. It kicks in for auto accident, primary residency, etc.
But you have to be careful about liability protection since personal umbrella insurance is mostly follow form and not drops down. Need to look at landlord and auto policy to see whether the liability protection that you wanted are covered. If not, either add there or pay extra in umbrella to cover those. For my landlord and auto policy, those liabilities are compulsory some how, so I no need to pay extra to get them covered.
Although Kansas, I think, can’t be shown as an example, pass-through legislation destroyed the state’s income. Most everybody qualified for an LLC. You as an investor may profit, but then the whole state infrastructure, schools, health, and other services will be cut off.
The purpose, at least one, of an LLC is to protect you from being sued in the total of your networth. The damage stops at one business or entity, the LLC.
Any umbrella, to my understanding, will protect you up to the amount of the coverage. After that, you are in God’s hands, or should I say your lawyer?
In practice, any lawyers can penetrate 
a Single Member LLC easily. Since LLC is a business, you need to borrow mortgage at business rate, any existing personal mortgage loan have to be repaid immediately.
In practice, if you’re sued, the first thing insurance companies would try to get out of it, if they can’t, auto/landlord/home owner insurance company will provide lawyer to work with umbrella’s lawyer, and they try to settle at a couple of tens of thousands dollars (most predatory lawyers want quick and fast bucks so they would settle). Lawyers know no point dragging on, very costly for both if they lose. Most suits are predatory and chance of winning is not high. Surprisingly, single member LLC is easier to sue and win, compare with insurance lawyers.
Btw, insurance is only for Black Swan event
More love for LLCs…
IMO, buyinghouse statement is right. Single member LLC or S-Corp or Corp are individual entities and act as a firewall against great loss.
Lawyers can penetrate, the same way, counter lawyers can block it. If LLC/Corp is not there, defensive firewall is lost.
When sued and lost the legal battle, LLC/Corp protects touching personal Net worth. It is easy to file bankruptcy and get away protecting existing personal net worth.
He is right in theory, so are you 
, in practice…
Thanks Jil!
I said this in another topic. I talked to this guy, he is good at creating trusts. I got lost in translation, but imagine a hotel. He can create a bunch of trusts within a trust. Say they sue you for x reason, they only get the carpet of one room in that hotel. Second person sues you, he gest the doormat.
There’s something you should never, ever put into a trust. I won’t say it but most people get in trouble by doing so.
[quote=“buyinghouse, post:10, topic:2251”]
He can create a bunch of trusts within a trust
[/quote]Are you refer to trust or LLC?
Series LLC is not tested in court. Not sure about series trust, didn’t ask my lawyer.
Irrevocable or living trust? Depreciating asset like cars should not be held in trust, if that is what you want to say.
[quote=“hanera, post:11, topic:2251, full:true”]
You have done your homework. Yes, cars shouldn’t.
The other question about trusts? Believe me, I was with this guy for 8 hours and I couldn’t touch the bottom of his knowledge. He wipes the floor with lawyers and I don’t mean it to insult them but he is a walking encyclopedia when it comes to taxes and whatnot.
Any day you have some trust on me I can recommend him to you. He lives in Sacramento.
[quote=“buyinghouse, post:12, topic:2251, full:true”]
There are plenty of Trust types available for various purposes. Depending on the amount, say 5M or 20M or 100M or more, trusts can be made…
In my understanding, trust will not make a firewall when sued, but LLC and Corp will make it.
On either case, the best is to consult an attorney, specialist in creating trust, and work out a plan.
Look at this site
Campbell or Cupertino places. If someone is interested, feel free to attend his Seminar.
S corp has much better protection vs LLC. How much more work and expense is needed for S Corp vs LLC?
It’s super minimal. You need to have an annual shareholder meeting with minutes. Most states let one person serve in all the required officer positions.
Then you can set up a single member S Corp, with pass through tax, and you serve all the officers. This way, your personal asset will be protected.
You can even set up one S Corp for each rental. That way, all your asset would be protected from each other.
you need to a fee to california - 800$/year/per afaik - in either case.
$800 per year is not too bad. You often pay more for totally useless fees
$800/yr per business. It’s the minimum tax for business entities. That’s $800/house if you do your plan of setting one up per home. That’s a lot of extra money.