For those of you with multiple LLCs for your rentals, what types of naming convention do you use.
I've heard a few like street address, or plain numbers.
Some states don't allow just numbers and some baulk at initials.
You dont need an LLC at all let alone having one for each property. When you think about the initial set up cost and ongoing yearly cost it can kill your cash flow.
$325 to set one up
$325 yearly renewal fee
$300-$500 for CPA to file tax return for it
You will then need to get a separate checking acct for each one also.
Too much hassle and expanse.
All you truly need is enough insurance coverage if you are worried about being sued. Get an umbrella insurance policy.
You are correct. Having each property in its own LLC is a great way to unnecessarily kill cash flow. However, some states allow you to create a series LLC that allows divisions within a LLC. For you, it would work since Tennessee allows series LLCs , but unfortunately for William Morrison in Maryland it would not work.
Beyond the benefit of having each property in a separate division or "cell", there are a few negatives. These include filing fees for each cell created, maintaining bank accounts for each and maintaining books and documentation for each.
I could go on and on about series LLCs, but this is probably the most pertinent information!
To answer the actual question originally asked:
I use a series LLC and name each series the name of the property.
ABC, LLC - series 123 main st
ABC, LLC - series 789 first st
I hope this was useful!
Curt, the LLC vs Insurance is probably a little off from my question, but I will ask you anyway .
Do you see a Square Foot, Total Asset or maybe just number of multi-family doors as a break point for you?
I'm looking at a 50 unit apartment complex and the costs you mention disappear vs the insurance and the things the insurance doesn't cover.
Or let's say a single or multiple collection of single family homes with a net worth of a million per entity.
By the way text never gives tone very well. This is not meant as a shot or argument.
Thanks Jake, all though I live in Maryland they wont be here.
I do keep books by property anyway, except for general overhead which is a separate entity for the most part.
My bank accounts are free and it helps with the books.
Also lost in the LLC assumptions is that it's personal.
A Checkbook IRA is best done in a LLC in my opinion.
And I have both personal, IRA and 401k to deal with.
Couldn't find it using BP search but it came up in a DuckDuckGo search.
Great thread in about 2009 on naming conventions.
Even had some great ideas on how to be sure to get sued. <Grin>
Like the series deal but some states don't allow it. Funny when I started buying real estate I think there were still four states that did not allow LLCs.
Just a side note: LLCs do provide benefits when passing on assets not available when in your own name. It's not just liability protection.
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