Structure a business

[Jose Pena]

Hey BP members, I have been researching on how to structure the start of my rental empire. I hear a lot of everything...one LLC for each property...one LLC for all my properties...different tax strategies... My question is what is right? I want to buy rentals, have them protected and able to enjoy tax benefits. Can I get an opinion on the newest structure I’ve listed below: Trust ⬇️ Holding LLC (In LLC frIendly state) ⬇️ LLC 1(Rental 1) (In same state as rental) LLC 2(Rental 2) In same state as rental) LLC 3(Rental 3) In same state as rental) and so on... From my understanding the lower LLCs should have the income flowing to the holding company which controls them all. Could I get some help with this? 🙏

[Hector Bilbao]

Jose,

What is right depends on your risk tolerance and amount of entities you are willing to handle. The more entities the more paperwork.

1. You want protection: LLCs offer that.

2. You want tax benefits: LLC offer that.

3. What is the purpose of a trust? High CA tax? anything else? Why type of trust?

4. What tax benefits are you looking for?

5. What is your exit strategy?

6. Single Family homes or Multifamily?

7. Are you the only investor?

8. How many properties total you plan on acquiring?

9. Is this your only business? Do you have a job too?