Question about LLCs
I am looking to purchase a second rental property early next year. I was reviewing my plan with my financial advisor, and he recommended I restructure my LLC.
1.) Have a separate LLC for each rental property.
2.) Move all of the rental property LLCs into a single holding LLC.
Does anyone here do this? And did you use a lawyer to set it up?
Most Popular Reply
Hi @Paul Green - This structure is generally recommended. I'd personally save money and use a registered agent to set up the LLCs. Paying an attorney to do so will cost significantly more.
Definitely use a lawyer when deeding properties to the LLCs. Everything beforehand can be completed by you! Even a quick consult with a tax advisor or attorney to determine the exact structure (SM LLCs/two-member holding LLC/etc) will cost less than hiring them for the entire entity formation process.
Lastly, never rush into creating entities. The advice you received seems sound, but there are entity structure "gurus" that will sell you on unnecessary structures, costing you thousands and more in tax filing fees. You want to have a structure that does not negatively impact the tax side of things or create any unnecessary filings.
Everyone's situation is different. For someone just starting out, a bigger insurance policy might make more sense than the entity headaches.