When Is it Best to Create An LLC?

[Jason Carter]

Hi- Currently I have 3 properties (2 investment, 1 primary residence). I live in New Jersey. I'm wondering when does it make the most sense to create an LLC? Any advice on the recommended structure? Umbrella with each one in an individual LLC, perhaps? Are there any books folks would recommend on understanding an LLC in regards to real estate investing? Thanks, Jason

[Samuel R. Harden]

I'd advocate both an umbrella policy (to protect the assets within the LLC) and an LLC (to protect your assets), and I agree that chunking is the best way to go (typically up to five SFR). Typically, I'd only suggest one property per LLC if it's a large property (apartment complex) or you have good reason to think there will be issues with the property.