About to purchase a small park .(7 spaces) Was asked if I wanted my name on the contract as the buyer or as an LLC.
Was told if I had adequate liability insurance I would not necessarily have to be an LLC.
Do you guys always purchase as an LLC? Even a small park?
yes. Always. Period.
Do not own the park in your own name…
Just my 2 cents… I do feel strongly about this- and that might come across…
Regardless, you are correct that carrying plenty of insurance is a great defensive measure to ever having a problem, along with proactively looking for potential liability and getting it fixed before a problem occurs.
In our litigation-happy America, you need to be more defensive than ever in keeping your assets.
In 32 yrs now, we have never been in litigation. That said, everyone will tell you, your #1 line of defense is insurance. NO! Your #1 line of defense is simply being nice. Then the 2nd line of defense is insurance - and lastly an Entity.
LLC is the correct entity to hold property (as opposed to a C corp).
But then understand how to properly run an LLC to make it ‘real’. If you co-mingle funds, if you don’t have member resolutions, annual meetings, operating agreements, etc. Then you really have nothing. Dyches Boddiford has the best courses on this subject that I’ve ever seen - you’ll need some education on this - or Attorney fees will eat you up.
The reason you need this - in our evictions, some of the Defense Attorneys are grabbing at anything and trying to prove your LLC doesn’t have the authority to evict. We have several companies - including a management company. We have to have a member resolution allowing the LLC that owns the property to allow the management company to manage the property for them. If you don’t have that written agreement, the judge can send you back - and return to court when you have the proper docs - allowing the tenant — who we all know owes us money - to stay longer - and we have to pay more Atty and court costs.
So we - I assume like most of the guys here - have multiple parks all in different LLCs - then a management co LLC who may manage all of them.
Or put it in a Trust (yes, another course) and you simply as the Trustee - and the beneficiary? Who knows??? You are simply the Trustee - the beneficiary is some obscure, reclusive IBM heir in the Keys. you are just the lowly Trustee who is kept in the dark.
Think of an LLC as a brick wall - sturdy and if built correctly will do it’s job. and think of a Trust as a fabric sheet - no real ‘protection’, but no one knows what is behind the sheet - it may be ten brick walls.
Get the LLC and run it correctly - and be nice.