LLC vs Sole Proprietor liability

in
Chicago, IL
Level 1
127 Views

Looking for some advice. We bought a vacation rental property in our own name and have a 30 year mortgage on it. We carry decent amount of private insurance but the house is in our names not a LLC. Ive been reading various horror stories about being getting sued, legal fees, etc. From what I gather since my rental is in my name, even with the insurance all my assets  (my personal home) could be on the chopping block if I get sued.

 

Id like create an LLC but from what I'm reading unless you have the house paid off its difficult to secure a loan or modify current loan.

 

Can someone recommend what I should do to protect my family and personal assets?

 

Do most people have an LLC? Or do you Sole Proprietor and carry extra insurance?

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1 Reply

Re: LLC vs Sole Proprietor liability

in
Swannanoa, NC
Level 10

@Tom2980   You need the advice of a good attorney.  Our properties are in an LLC, but we own them outright (no mortgage).  You may be able to keep the existing mortgage in your names while at the same time place the business aspect into an LLC.  Again, seek the advice of a good attorney.

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