Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Hello to all !!
Old 06-21-2006, 06:00 PM   #21
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Quote:
Originally Posted by Martha
However, remember that you are always liable for your own bad acts and negligence, even if you have a corporation or LLC.* Therefore it is important to have excellent liability insurance.*
Well I have a 2M umbrella policy. Maybe I need to up it??

The whole liability thing appears to have many pitfalls. It seems a perfect match for qualified council to guide you. A $500 to $2000 attorney bill will be a pittance if you do make a mistake and damaged party goes after you.

Also one of my big commercial buildings is owned 50/50 joint tennancy. It is paid for cash so it provides good cash flow. However there are many expenses to take care of as the lease is negotiated as landlord pays all costs. We have a government tennant that leases the whole 7,000 s/f thats how they like to set up the leases. It grosses almost 100k a year but we pay out 32k in expenses which includes 8k of accrual for repairs. However the checks never bounce
__________________

__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Hello to all !!
Old 06-21-2006, 06:51 PM   #22
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 14
Re: Hello to all !!

Just curious, what are your thoughts about paying for college expenses for the now 11 and 8 year old kiddies?

We've got a set of liabilities - I mean kids - aged 3, 6 & 9 and now have about $80,000 in UGMA accounts plus $100,000 in TSP money earmarked for college. I'm concerned that's not going to be enough. I'm counting on them getting financial aid based on family income being way down in retirement from what it is now.
__________________

__________________
Green Jeans is offline   Reply With Quote
Re: Hello to all !!
Old 06-21-2006, 07:05 PM   #23
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Quote:
Originally Posted by zaniew
Just curious, what are your thoughts about paying for college expenses for the now 11 and 8 year old kiddies?* *

We've got a set of liabilities - I mean kids -* aged 3, 6 & 9 and now have about $80,000 in UGMA accounts plus $100,000 in TSP money earmarked for college.* I'm concerned that's not going to be enough.* I'm counting on them getting financial aid based on family income being way down in retirement from what it is now.
I have lived very happily on 2k a month for years (If I had no bills). I really dont see that changing a whole lot. I just dont require much in the way of material things to make me happy. My truck has 100k on it. I diligently do maintainance and I will happily drive it to 200k.

That being said I will have a lot more income than I can utilize. That will fund PART of the college. They will be able to live at home and I will foot all the room and board expenses. However, I expect them to take a part time job to HELP pay for college even if it is a token amount.

I saw too many rich kids in college that were there because their parents wanted them there and they had no investment in their future and they did not apply themselves.

I worked nights and did school in the morning and paid for it myself. I worked my buns off in college because I was paying for it. My folks helped me the best they could but they still had 2 kids at home to feed. They both worked their buns off full time but even at that they were not able to help much.
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 06-21-2006, 07:07 PM   #24
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,563
Re: Hello to all !!

Quote:
Originally Posted by zaniew
Just curious, what are your thoughts about paying for college expenses for the now 11 and 8 year old kiddies?* *
We've got a set of liabilities - I mean kids -* aged 3, 6 & 9 and now have about $80,000 in UGMA accounts plus $100,000 in TSP money earmarked for college.* I'm concerned that's not going to be enough.* I'm counting on them getting financial aid based on family income being way down in retirement from what it is now.
I sympathize with your situation, but we have our own kid to send to college and I don't think it'd be appropriate for me to jeopardize her plans (and my ER) to pay for your kid's college educations, too... but I must admit that I'm impressed by your innovative initiative in having the courage to ask a board full of strangers for their assistance!

Maybe the colleges they're planning to attend would be willing to discuss scholarships & financial aid?
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Hello to all !!
Old 06-21-2006, 08:35 PM   #25
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Oh, I forgot to add. Even if my kids only are able to contribute a token amount to college I will most certainly pay the rest. I love them dearly and want the best for them. However, I also want them to learn to be responsible citizens that contribute to society instead of take from it. That is something that college does not teach you but in my view is probably more important to impart in a young persons mind than what you learn in college. OK, I will put the soapbox away
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 06-22-2006, 12:59 AM   #26
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Quote:
Originally Posted by Martha
Probably not.

No there isn't.* But if you have co-owners or employees it is vital to have the protection.* If you have a general partnership, you are personally liable for all the partnership debts.* At least with a LLC/corporation you are not liable for your co-owner's negligence and not liable for trade debt.* If one of my co-owners in our professional corporation committed serious malpractice that went beyond our insurance limits, we may lose the business but at least I won't be liable for his negligence.
Martha, I do own one building as 50/50 with a business partner. We had originally agreed to hold this as tennants in common. Would this be a good place to use a LLC?

Also did I understand you correctly that each asset should have its own LLC? As an example. 10 investment properties in portfolio, 10 LLC's.

I guess one of my concerns would be making a mistake, getting sued and loosing everything. Or even a person without a valid complaint file suit, tie me up in court piling up fees for representation only to pay them off to get them to go away.

Unethical worms, looking for handouts. Filing suits with no merit just looking for the buy off. You hate to cave to them but sometimes it makes sence from a business standpoint to just make them go away.
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 06-22-2006, 08:21 AM   #27
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,211
Re: Hello to all !!

Quote:
Originally Posted by Enigma
Martha, I do own one building as 50/50 with a business partner. We had originally agreed to hold this as tennants in common. Would this be a good place to use a LLC?
That is one possibilty.* Also, in some states you can easily convert this probable partnership to a limited liability partnership.*

Quote:
Also did I understand you correctly that each asset should have its own LLC? As an example. 10 investment properties in portfolio, 10 LLC's.
* Yup.* Easy and inexpensive if you are the only owner.* Single member LLCs are ignored for tax purposes.

Quote:
I guess one of my concerns would be making a mistake, getting sued and loosing everything. Or even a person without a valid complaint file suit, tie me up in court piling up fees for representation only to pay them off to get them to go away.

Unethical worms, looking for handouts. Filing suits with no merit just looking for the buy off. You hate to cave to them but sometimes it makes sence from a business standpoint to just make them go away.
At least good insurance helps.*

Here is a thread from a while back that talked quite a bit about efforts to protect assets from creditors and some possible strategies: http://early-retirement.org/forums/i...p?topic=2016.0
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Hello to all !!
Old 06-22-2006, 10:10 PM   #28
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 260
Re: Hello to all !!

zaniew
Your kids are lucky - how many parents pay for that much of their kids education?
But the TSP - won't that come out as a loan? Or will you be retired by then?
__________________
virginia is offline   Reply With Quote
Re: Hello to all !!
Old 06-23-2006, 07:01 AM   #29
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 14
Re: Hello to all !!

I'd only use TSP $ when I could do it as a withdrawal without tax penalty. I'm 50 1/2 now, and the youngest is 3, so I have plenty of time.

Re funding college in general, I too am all for the "they need to learn responsibility, appreciate it, and by god work and contribute money they make by their own grubby little selves" school of thought. Trouble is, the college financing paradign has shifted since I got my degree in the 70s. Then your summer job, and the job you had as part of your financial aid package (if you had one), and the job you might have had beyond that, actually added up to a respectable percentage of the total tab. I think generally a kid could make it out with an undergrad degree without the family mortgaging the house (if they chose to, or could, help pay for education); and without the kid having a staggering amount of personal debt.

Now it is much more the norm for an undergrad to emerge with about $35K in educational loans (with a gov't backed interest rate of about 6.5 rather than the 3% I had access to. )

I wish it were different, but I think most summer jobs for teenagers aren't going to substantially finance a college education. Therefore, that's an expense I see in my future that's factors into my "just when do I pull the plug" retirement thinking.
__________________
Green Jeans is offline   Reply With Quote
Re: Hello to all !!
Old 06-23-2006, 01:29 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 21,804
Re: Hello to all !!

Quote:
Originally Posted by zaniew
Re funding college in general, I too am all for the "they need to learn responsibility, appreciate it, and by god work and contribute money they make by their own grubby little selves" school of thought.* Trouble is, the college financing paradign has shifted since I got my degree in the 70s.* Then your summer job, and the job you had as part of your financial aid package (if you had one), and the job you might have had beyond that, actually added up to a respectable percentage of the total tab.* *I think generally a kid could make it out with an undergrad degree without the family mortgaging the house (if they chose to, or could, help pay for education); and without the kid having a staggering amount of personal debt.* *

Now it is much more the norm for an undergrad to emerge with about $35K in educational loans (with a gov't backed interest rate of about 6.5 rather than the 3% I had access to. )
I don't see that as a big problem myself. If young people realize that their degree has to be self-amortizing at least, there would be fewer “Women's Studies” and Anthropology majors, and more civil engineers etc.

I know quite a few families that have stressed themselves to put a child through college, when he/she would have likely been better off starting to work for the railroad, or learning to type and joining civil service.

IMO, if you get them to age 18 in good health, without a serious drug habit and not currently incarcerated, you have done all you can reasonably be expected to do.

Sometimes parents want to control the purse so they can at least think they can control other things.

Ha

__________________
haha is offline   Reply With Quote
Re: Hello to all !!
Old 06-23-2006, 02:01 PM   #31
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,672
Re: Hello to all !!

Quote:
Originally Posted by HaHa
I don't see that as a big problem myself. If young people realize that their degree has to be self-amortizing at least, there would be fewer “Women's Studies” and Anthropology majors, and more civil engineers etc.

I know quite a few families that have stressed themselves to put a child through college, when he/she would have likely been better off starting to work for the railroad, or learning to type and joining civil service.

IMO, if you get them to age 18 in good health, without a serious drug habit and not currently incarcerated, you have done all you can reasonably be expected to do.

Sometimes parents want to control the purse so they can at least think they can control other things.

Ha
I agree with telling the kids that they need to assume a substantial part of the financial cost of their education both to promote focus and to understand that the education is preparation for the world of work.* When mine finished their schooling we picked up a substantial part of their school loans - but that was a gift and not communicated in advance.

I also agree that parents need to focus on getting their kids to the age of 18 educated and healthy.* Without that college is wasted.* With that everything is possible.

Now about that part of working for a rail road.. I hope you weren't serious.* With few exceptions rail roads have the worst employment conditions in the US, and their vaunted retirement program isn't all that great.* Yes, they and the civil service were among the early retirement systems but in today's world they aren't even close to being suitable choices.* [I have three close relatives who worked for RRs, a fromer RR manager neighbor, and met a RR executive recently whose employment was causing major health risks.* If you know of a good RR to work I know a bright, seasoned, hard working, RR executive ready for a change.]
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Re: Hello to all !!
Old 07-05-2006, 10:46 PM   #32
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 322
Re: Hello to all !!

Hi
I have a couple of llc's.Based on what I have been told by several parties
You wouldnt want to have too much equity tied into any one llc. You might decide that 250k or 500k is the most you want to tie into one llc. One good reason to not have paid off rentals.

The advice I was given differs from what Martha said though. I was told you always want to have a partner for your llc. The llc protects the innocent partners> so if you had a llc with me I wouldnt be hurt if you had a different llc that got sued.
Also if you crash your car and kill someone.. Again I woud have protection.
Most people also seem to confuse the llc idea with taxation and debt. Most people use their own credit. It costs more to do it with the llc and its not likely to be non recourse anyway.
__________________
spideyrdpd is offline   Reply With Quote
Re: Hello to all !!
Old 07-05-2006, 11:12 PM   #33
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Spidey,

I dont understand "One good reason to not have paid off rentals" Please explain. Next year I have more 1031 money coming on line. Your comment has me interested.
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 07:02 AM   #34
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,211
Re: Hello to all !!

Quote:
Originally Posted by spideyrdpd
Hi
* *
* * * * * * * * *The advice I was given differs from what Martha said though. I was told you always want to have a partner for your llc. The llc protects the innocent partners> so if you had a llc with me I wouldn't be hurt if you had a different llc that got sued.
Also if you crash your car and kill someone.. Again I would have protection.
Most people also seem to confuse the llc idea with taxation and debt. Most people use their own credit. It costs more to do it with the llc and its not likely to be non recourse anyway.
I am not quite sure I know what you are saying and how it differs from what I said.* If you own a property with no other owners, in most states you can own that property in a single member LLC.* I wouldn't go searching for another owner for that LLC unless you have a good business reason to want another owner.*

However, if you own a property with one or more other people,* a corporation, limited liability partnership, limited partnership, or LLC are all good ways to hold that property.* As you said, if a claim is made against one of your co-owners for what that co-owner did, you will not be personally liable unless you did something wrong yourself.* For example, say one of your co-owners, without your knowledge, sexually harassed a tenant in a rental property owned by the LLC.* The tenant could sue the co-owner and the LLC.* You should not have personal liability. However, if you owned the property in a general partnership, all partners are liable for all claims against the partnership.* Therefore you could in those circumstances have personal liability for your partner's sexual harassment of the tenant.* *


__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 07:04 AM   #35
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,211
Re: Hello to all !!

Quote:
Originally Posted by Enigma
Spidey,

I dont understand "One good reason to not have paid off rentals" Please explain. Next year I have more 1031 money coming on line. Your comment has me interested.
He might be saying that there is more to lose if a claim is made against the LLC.

Personally, I want as much equity as possible. Leverage is good in building up real estate investments but leverage has its own risks. I say build equity and buy good insurance. And don't be a bad boy.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 09:29 AM   #36
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Martha,

I tend to agree with you view on equity position. I initially went in with 20% down. Now that I am better funded its usually 50% or greater down.

Another question: I am definitely going to consult my business attorney on the LLC for the 50/50 joint tennancy building. Thats sage advise on your part.

I presently have 2M in personal umbrella insurance.
Is this the correct type of insurance to have to get the correct protection for my real estate / investment assets? All of my assets are held with the same insurance company so I thought they all "fell" under the umbrella.

Thanks for chiming in. Do appreciate the thoughtful input !
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 10:07 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 15,890
Re: Hello to all !!

Quote:
Originally Posted by Enigma
All of my assets are held with the same insurance company


What do you mean by this?

If you have a personal umbrella policy, it will prevent people who sue you personally from getting to your assets in the LLC (assuming the limit is high enough). If you are running a business of some sort, any liability arising from it wouldn't be covered by yor personal umbrella. You would need a commercial umbrella or "BOP" (Business Owner Policy).
__________________
"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."


- English Bob
brewer12345 is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 11:58 AM   #38
Dryer sheet aficionado
 
Join Date: Jun 2006
Posts: 30
Re: Hello to all !!

Brewer,

Sounds like I may need to look into a BOP. I do not operate a business out of any of my properties. I just lease / rent buildings for positive cash flow.
__________________
My goal in life is to simply wake up each morning and decide what "I" want to do today.
Enigma is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 02:58 PM   #39
Recycles dryer sheets
 
Join Date: Jun 2006
Posts: 322
Re: Hello to all !!

Hi
I am not trying to step on anyones toes.

One of the guys went as far as saying to make a charity a 1% partner. I am guessing Dory wouldnt mind you listing this forum.

The point he made was if your driving a car and get into an accident and the llc is in your name they can go after the assets of the llc. If the llc is in a partnership the person suing would get a charging order. This gives you the ability to negotiate the settlement. Since you dont have to pay on a charging order. You can delay payment.
Everyone said it was better for the 1-800 slip and fall lawyers. Since they get paid on contiguency they are less apt to want these cases.
There is a thing called equity stripping. You can create a lien against the property. If you have multiple properties you can just focus on paying down one. Which I personally think is better . Its like the snowball debt idea. You pay off a property and then it cashflows better. Again if a property has liitle equity it will not be as attractive a target for a slip and fall type lawyer.

I also have an umbrella policy on my propeties. Which may actually incourage the slip and fall guys. Since your back to having deep pockets.

I am not a lawyer like Martha is. Most of this stuff was taught to me in seminars and reinforced by stuff on the web. Another seminar person taught the PREMES which is what Lance (Psyops) uses.

Past that I get confused. You can have it be a family member. They can have 1%. If you have multiple llc's I ahve been told it can be the same members if the ratio's are different. So your brother Bob can have 5% in one and 2% in anaother. Or maybe it may be better to have another person ?

For premes information
http://forum.richdad.com/forums/prin...300737&mpage=1

Not the person I saw but discusses the single member llc issue.
http://www.hansonbridgett.com/newsle...PlanAug03.html
__________________
spideyrdpd is offline   Reply With Quote
Re: Hello to all !!
Old 07-06-2006, 03:09 PM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 15,890
Re: Hello to all !!

Unless you plan on running an unsafe operation or remaining thinly-capitalized enough that going bust is an attractive option at some point, I fail to see how any of this mumbo-jumbo is more effective than simply holding properties in an LLC and having adequate liability isurance. I guarantee any insurer will fight the slip & fall crowd tooth and nail rather than pay out, and they usually have VERY competent counsel.
__________________

__________________
"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."


- English Bob
brewer12345 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 07:54 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.