LLC Formation, who's the managing member?

[Bruce Scannell]

BP world,

I'm trying to put together the operating agreement for a property holdings LLC and need input on the pros and cons of making myself managing member. I have a management LLC with my wife and I, and I'm looking to create a property holdings LLC with myself and the management LLC.

For others that have done this, do you make yourself or the management LLC the managing member? I want to have the additional asset protection, so I'm thinking of making the LLC as managing member, but my CPA says I should make myself the managing member. If thats the case, whats the purpose of having the management LLC in the holding LLC?

Thanks in advance,

Bruce

[Jerry W.]

@Bruce Scannell, I have about 15 properties more or less in my Sub S company. I have 2 SFRs that I own in my personal name that are rented out. When I thought the Sub S Corp was going to be sold off for folks retiring I began buying houses in my personal name. I eventually bought out the other shareholders, but figuring out the tax consequences of moving them now has kept me from putting them into the company. Both of the SFRs are class B or better so they do not cash flow, they are just making their payments. Since I am hands on, I see no reason to form multiple companies. I like the flexibility of a Sub S as I do sale some real estate from time to time and have been trying to do flips. I would probably use an LLC if I was starting over again. I do have apartments in the Sub S also. I pay over $1,000 for the tax return on the sub S and a few hundred on some other joint venture LLCs I am in. I cannot imagine doing 15 or 20 tax returns and having 15 or 20 bank accounts.