BOP - Best for Single Family Home Rental Property?

vc_cc · 2018-03-23T20:45:15+00:00

thanks for the extra info. I will check with my agent.

vc_cc · 2018-03-18T00:34:53+00:00

gotcha. someone on the commercial side told me that I should look into adding it as an addendum to my home owner but i have not seen any info on it.

vc_cc · 2018-03-17T23:21:14+00:00

hey thanks for the reply, are you a broker? what are the alternatives?

vc_cc · 2018-03-17T23:20:02+00:00

maybe she was, i dont know. The agency i use, and had for a long time, is one of the most respected and well established in the area. Never had an issue with them and they went to bat for me when i needed them.

However, they did have some organic turnover - particularly my long term broker moved up and I got someone more green.

In any case, this is why im asking. I have heard it is fine, but I am trying to figure out if its the best option and how it may compare.

vc_cc · 2018-03-17T21:36:36+00:00

i cant take the passive losses because earnings are too high. thats why im looking to create an event that would allow me to take the losses

vc_cc · 2018-03-17T21:28:26+00:00

well thats an absolute killer. it would more than void any benefit of doing this. Thanks for the info.

vc_cc · 2018-03-17T19:35:21+00:00

Thanks for the comment. I will call and ask. That policy description sounds good - and also sounds similar to a BOP.

vc_cc · 2018-03-17T19:34:09+00:00

renters policy is a condition of the lease so they do have renter's insurance. I will call my broker about a DP-3 policy.

I am going to be very unhappy if its available and its considerably cheaper than what I have been paying.

vc_cc · 2018-03-17T15:34:33+00:00

really thank you for taking the time on a thorough reply.

Economic substance - good point, i didnt know it was required but makes sense. I would say there is an economic benefit to me in that I can unlock equity. Also, I am not allowed to transfer the property by the lienholder - so i have to sell it or refinance it.

As for the single vs multiple member - No offense taken at all, and you are partially right on my research driving the quest; but it was done on the recommendation of attorney after asking him. This would be a separate question and i wonder if it would have been an issue cause i would actually be stripping my spouse of her ownership claim on the property if i were to move it to a single member LLC, right? (or would spousal rights in a spousal state means that she would have claim to the single-member LLC as well?)

I am confused by your comment about a single member LLC benefiting from the losses. I dont understand why it makes a difference.

And yes, the partner in the LLC is my spouse, who is also on the title of the property and on the loan. Why is it moot?

Sorry for the follow up questions, but I appreciate the insight.

vc_cc · 2018-03-17T15:11:32+00:00

my broker, whom i have had for over 15 years - said this was the only option i had. I read it, and im no expert, and it definitely appears that it offers the right coverage - including some extra perks (that i may not need) like income replacement.

I talked to others and i didnt get any options - so if i call, do i ask for a "rented-to-others" policy? is there a particular name or type I should mention?

vc_cc · 2018-03-17T14:43:42+00:00

Thanks for the reply.

We, the owners of the house, and the members of the LLC are myself and my spouse. So this is disallowed because the members of the LLC are the same? If there was a 3rd member, would it then be allowed?

Thanks for the math - how does depreciation get factored in? Lets assume this gets done, the LLC now has a 30 yr depreciation schedule? So what happened to the depreciation that drove the prior losses?

vc_cc · 2018-03-17T14:39:54+00:00

Thanks for the reply.

The LLC has 2 members since single-member can be challenged as a disregarded entity in cases of liability and the whole purpose was to shield liability just in case (and we are not getting this benefit cause the house is still on our name instead of the LLC).

Anyway, I will retain a tax advisor but wanted to get some thoughts first.

vc_cc · 2017-03-19T20:27:22+00:00

That makes sense.

Would you give me a little more insight why cited violations, that would otherwise prevent someone from being there at the same time (the car wouldnt have been on the road), would be irrelevant?

Is there any violation that would be relevant? Would a car going against traffic be relevant?

vc_cc · 2017-03-19T20:05:13+00:00

I understand and I appreciate the feedback. Good to hear the other side from an objective standpoint. And I dont take it personally.

To your point about them being better at this and their experience, I wouldnt think that they would agree to any liability unless they assessed that they had some risk - so i would be very hesitant to consider that they dont have any liability at all. If they were more comfortable with it, they would have sat steadfastly at a lower fault rate.

Why would you think that they have not considered the passenger? If that was a viable option I am sure they would be hiding behind it right away, not wait until I sued.

Your point, of myself overestimating likelihood of a positive outcome, stands; and I'll consider it. I cant say I will or will not pursuit it further. I am still a little incredulous about someone just being able to illegally drive on a road, cause an accident, and an insurance company say that its a split fault. This is not exactly the same, but arguing that a driver illegally being on the road has no relevance, is akin to it.

Again, appreciate the time and info.

vc_cc · 2017-03-19T19:12:53+00:00

Sorry to continue in this long thread.

How do you figure a loss of several hundred? I would be very surprised if a judge determines that their liability is that much lower than what they have already offered.

Assuming that it is a disaster result for me: judge takes their number and lowers their fault to just 60% - that would be $900 vs $1200 I was offered just now. A loss of $300.

If as you said the judge picks a number in between, so $2000, and then also lower their fault (though i dont see any reason to change what they have already admitted as 80%) to 60% (which would be a huge swing), then it would be $1200 to me - breaking even with the current offer and being out my time and court fees.

But if fault stays at 80% then I would get $1600, thats $400 over the current offer.

Again, I see more upside here - and perhaps I am talking myself into it. I know the offer they made is exactly what it is in order to be right at the edge of being enticing enough for me to take it as opposed to pursuing further.

vc_cc · 2017-03-19T19:01:27+00:00

I was told that I could chose my own repair center, and that it would be repaired to my standards.

Well, the shop can defend their number as being objectively reasonable. Does the court appoint an expert to assess if it was objective?

The choice of shop was based on the fact that it was a lease, and as such I was subject to repair that matched the lessor - otherwise I would be liable at turn in for incorrect repair.

Not sure why this would be different than if it was my own insurance co.

Appreciate the feedback. I guess I will consider it all before moving forward. The cost has been sunk, so while the financial risk is there, I consider the upside to be worth it. I dont know how much is it worth for me to "feel better" about it; the upside is prob around $800, the downside is prob around $200.

vc_cc · 2017-03-19T18:26:02+00:00

The amount I am requesting ($2500) is not an estimate, its the actual paid cost to repair the car to acceptable level.

The Insurance co. estimate was $1500 - their offer to me is 80/20 so $1200 to me.

I dont disagree with you that the share of fault will be tricky and I can see how I may not get much more, or worse I get dinged with a higher fault level.

However, if (and this is where I am mostly focused) the amount considered needs to be the $2500 paid - then an 80/20 split means $800 higher than now. Even if i were to take a beating and its 60/40 then I still come out $300 ahead.

Yes, you are right, there is a cost of time and resources to go through this. Part of my impetus is out of principle. Hate that they play games and are unresponsive to even having a conversation. I am not trying to cheat them - the $2500 is exactly what it cost and I have expressed that Im willing to settle at 80/20 if we use the actual cost - meaning i am willing to eat the $500.

So, in other words. Assuming I am not seeking further fault - all I am seeking is that they use the actual cost of repair as the basis for their offer. Basically asking a judge to rule that the cost of repair is $2500 - am i better off approaching it this way?

Thanks again - this is all very informative.

vc_cc · 2017-03-19T17:48:25+00:00

Thank you again.

I'll take your word that its irrelevant, but if driver was not supposed to be on the road, then there would be no accident. But IANAL and so you may be right.

It is an incorrect assumption that I didnt have room. I had enough room that not only was i able to pass, their door barely caught my car. The car in front of me also went through without a problem. Actually after I pulled to the side, a whole slew of cars for the next 2 hours went past it without issue.

Suing the passenger? Maybe i should have thought about it back when it happened but the passenger just walked away and wasnt even interviewed by the police. The cab and insurance co. can sue the passenger and recover their money.

Thank you again for the advice. If I am going to get screwed then I should exhaust all avenues, no? Whats my risk? That a judge orders the same % of fault? If thats the case, at the very least it should be base don the actual cost of repair, this would mean 80% of $2500 (instead of $1500). Is there a possibility that insurance co. chooses to settle instead of risking going through?

Perhaps I am naive, but I see a few possibilities where I come ahead from where I am now, maybe not made whole, but better than now. Do you disagree?

I do appreciate the time to provide advice and help.

vc_cc · 2017-03-19T17:30:45+00:00

Understood - this is why I am choosing to file.

I consider it a pretty easy case: a) Repair was quoted by shop, and paid out of pocket to my (and lease co. standards) as it should have been. This was about $2500 b) Ins. company delayed any offer or payment - car had to be repaired. This was done after adjuster reviewed vehicle but prior to receiving any quote, offer, or payment from ins. company (approx 2-3 months after accident) b) All paperwork, pictures of repair, etc was sent to ins. company c) Ins. company tried to low ball, both with a 60-40 offer of fault and $1500. The best they were able to do was to get to an 80-20 level of fault - this means their offer was to pay $1200 for a repair that cost $2500

I expect to make my case for 3 main reasons: 1. At time of accident driver did not provide valid car registration - car/driver shouldnt have been on the road 2. At time of accident, driver did not have proof of insurance - car/driver shouldnt have been on the road 3. The physics of the "accident": cab pulled to the side on a narrow street to let passenger off. Passenger chose to open travel-side of the road and hit my car. I was already past the car when I was hit. It sucks that in NY state, police dont determine fault; so its up to the parties to argue it with each other.

Altogether I think its a strong case (but im not a lawyer and this is small claims). Most of this is out of principle - insurance co. has been wasting my time since September 2015.

Its a good question - I dont consider the offer is fair but maybe I have wrong expectations. Sorry for the long post and thanks for the help.

vc_cc · 2017-03-19T17:17:28+00:00

I did not file a claim with my insurance company - they were notified but I did not see the need to file with them. I was not at fault, high deductible would make it prohibitive, and no need to give the insurance co. reason to increase premiums.

I believe insurance is only to be used for catastrophic events, or at times when it would create unnecessary hardship - this was neither.

vc_cc · 2017-03-19T17:15:17+00:00

Thank you - that sucks but it makes sense.

vc_cc · 2017-03-19T17:14:55+00:00

Thanks for the reply.

The other party insurance company is offering a payment that is considerably below the actual cost of repair. There is also a dispute as to the level of fault - they claimed a 60-40, their latest offer was an 80-20. They would not take the actual receipt of the cost of repair.

This is why i thought I had to file against the insurance company. So in this case, should I take the current offer and then sue the drive for the difference?

vc_cc

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