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  Wed Oct 17

Smithtown completely Renovated HAS BARN And Blydenburgh park trails Low Taxes $625k

Nice Updates; Wood Floors, Central Air, Large Driveway, Big Barn, Zoned For Horses With 3 Stall Horse Barn, Very Open Floor Plan, Top Hauppauge Schools And Forestbrook Elementary.


Under Contract

 


Click Here To View Virtual Tour 


If Interested Please Contact Sharyn Guzzi

Sharyn@lihorseproperties.com

631-979-2965

   
  Sun Oct 21

uuu

   
  Sat Oct 20

Oakwood Show OCTOBER 19TH JIM COSTELLO JACKPOT RACE

   
  Thu Oct 18

Laundry

   
  Thu Oct 18

Turning Buyers Into an LLC

Creating a separate legal entity for buying a second home is a smart way for ordinary households to protect themselves

If you’re working with a couple interested in buying a second home as an investment property, you might suggest they talk to a lawyer about setting up a limited liability corporation or other legal entity before they buy. That way, if they’re sued by someone who was on the property after they bought it, they can limit their damages and protect their personal assets against losses.

Suppose a contractor they hire makes negligent repairs to a deck and it collapses while tenants and guests are having a barbecue. The judgment in a case like this could easily exceed the equity the owners have in the property and even the coverage limits on their insurance policy.

Or perhaps they rent the property to a person who owns a dog not covered in a typical landlord policy and the dog bites someone on the property. State Farm, for example, determines risk based on a dog's bite history not its breed. The company paid $121 million in dog bite claims in 2016 at an average of $33,000 a claim. A claim of that amount might exceed the equity the homeowners have in their property. That could make their personal assets vulnerable to the judgment.

Or let’s say the carbon monoxide detector is faulty and the property has a 20-year-old furnace that develops cracks, releasing gas indoors. Tragically, a family of four staying in the property is killed. The owners could face four wrongful death actions caused by negligence.

Gravity of Risk

These are rare occurrences, to be sure, but they point to the gravity of risks that investment property owners can face. In fact, the scenarios illustrate one of the main differences between real estate and other types of investments like stocks or bonds: real estate can carry risks that exceed the investment in the asset.

Of course, an owner’s first layer of protection is insurance, but owners might fail to recognize that their losses can exceed coverage limits. Or there may be exceptions or carve-outs in the coverage that exclude or limit the losses. These gaps in coverage might expose the owner to unlimited liability. In today’s litigious world, $100,000, $300,000, or even $500,000 liability coverage may be inadequate. Also, owners converting their home to an investment property might not think to take out landlord or vacant property coverage.

To get the right amount of protection, buyers should strongly consider a personal liability umbrella policy with $1 million to $2 million in coverage. But they should also consider forming and running a corporation or LLC. The type of entity they can form varies and is governed by state law, but nearly all states allow incorporated entities like limited liability corporations, partnerships, C corporations, and subchapter S corporations.

Pricing Considerations

Deciding which type of entity to set up and how to structure it should be done with advice of counsel. The process may not be expensive. Depending on the area and particularities of the household, the legal work can be done for a few hundred dollars. There are also do-it-yourself forms online, but self-help isn’t recommended; these entities, whether for  your own investments or your clients’, have to be set up correctly to get the maximum protection.

Investing in real estate can be a smart decision. The right property can outperform other investment vehicles. But because real estate investment comes with potential pitfalls, it makes sense to have sufficient insurance and for investors to consider setting up an LLC or other type of entity to separate their liability from their personal assets.


   
  Thu Oct 18

Kent Animal Shelter

These little guys are small packages of sheer joy. Peanuts is just 2 years old and was surrendered to the shelter because the owner could no longer take care of her. She is just delightful.


Mason is a young Chihuahua mix that will warm your heart. He loves to cuddle up and gets along well with other critters.


Taylor will win your heart with just a glance in his direction. This little guy wants nothing more than to be your best friend.


For every minute that you don't have a dog, you loose 60 seconds of happiness. Don't wait! Life is short, get a pet!


Donate To Kent Animal Shelter!



   
  Wed Oct 17

Ape being born

   
  Wed Oct 17

Face

   
  Wed Oct 17

In My Day

   
  Wed Oct 17

judge

   
   
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