Just purchased a 2-family rental property with my brother. Should we?
get an LLC first, or homeowners' insurance first?
We want to protect against fires, floods, damage and lawsuits. We're fairly new at this, so any suggestions are appreciated.
We purchased this house in cash.
- GLv 54 weeks agoFavorite Answer
If you already purchased it, it's too late for the LLC. Well, you could grant deed it to the LLC after it's created but that's rerecording a new grant deed now. Escrow should have required proof of insurance, so again this seems a little late. Yes you need insurance even if you bought it cash and no bank is requiring it. You should also buy an umbrella policy it's cheap and protects you. Fires and floods are not as important as liability coverage from stupid tenants. The LLC provides an additional level of protection, but insurance is your first line of defense. You many not need or want to get incorporated unless you and brother expect to exchange percentages of ownership and responsibility from time to time. Just take title as tenants in common as to an undivided ??% and get lots of liability insurance.
- StephenWeinsteinLv 74 weeks ago
Homeowner's insurance doesn't cover rental properties.
Get insurance immediately, but get insurance that covers rental property. Do not get homeowner's insurance, because it won't protect against ANYTHING that happens to rental property.
- JudyLv 74 weeks ago
Neither. Get insurance, but homeowners' isn't for rentals. And flood insurance is something separate, if you're in a flood area
- Anonymous4 weeks ago
I don't believe a word you say. 2 years ago you had $50k in credit card debt and now you are buying investment property?
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- A.J.Lv 74 weeks ago
You state you already bought it. Cash? If new at this, it was a mistake. Contact an insurance agent.