MHP Asset Protection Advice????

General Real Estate Investing
1

My partner and I recently put a 53 space mobile home park under contract in SC and are currently doing our DD. The structure of our park is as follows:

  1. There will be lot renters where money is paid each month to rent the land; most likely collected by a management company
  2. We will add homes to our park and lease option them incorporated with a net lease to buyers with stated terms. The monies collected will also more than likely be the responsibility of the management company.

I have spoken with an attorney and CPA and their advice is:

  1. Form 2 LLC with one that owns the dirt and the other is where the monies are collected and dispersed.

OR

  1. Just have 1 LLC and then adequate liability insurance for the park along with personal umbrella policies.

Our main concern is asset protection, but any advice on the structure is welcome. Does anyone have experience in this and do you feel any of these options are the better route? Would you suggest something different? Lastly, would you use an attorney to set everything up or is this something we could very easily do on our own and save the attorney fees. Our agreement will be 50/50 with standard terms (as it applies to LLC).

Any advice is much appreciated.

2

You really need professional help. There is no such thing as standard anything for an LLC unless you want to waste your time and money and have nothing to show for it at the end. The operating agreement needs to be drafted for your particular situation and outlines all the responsibilities, contingencies, and expectations of the partners. How it is taxed is another question for a professional. My personal preference is to separate management from ownership.

If you plan to actually participate in the management of the park, you have much more to worry about than just one or two LLCs and anyone who advises only LLCs for you is incompetent or lazy.

The only thing you can do yourself and have a reasonable chance of doing it correctly is filing the forms with state. That is about 1% of the work. Doing anything more yourself is about as wise as doing your own brain surgery.