Updated over 6 years ago on . Most recent reply
Multiple Out of State Rentals - Need to figure out LLC structure
I currently live in NYC and own 4 out of state rental properties. I have 2 in OH, 1 in SC, and 1 in PA. They are all currently in my name, which I realize is a bad thing to do. I'm looking for a way to form an entity (LLC) that is simple and scalable. My goal is to grow my portfolio to a few dozen properties over the next several years, so the common advice I receive of an LLC per property seems like overkill and a huge burden that defeats the purpose of the term "passive"
1) What is the best way to accomplish my goal of forming an entity to protect my assets?
2) Do I have to form in the states that my houses are?
3) Through research, I'm thinking something like a Deleware Series LLC would work, am I right?
4) Somewhat related...but I would love to hear thoughts about how people are handling lots of out of state properties. Just with 4 it is starting to become a tax headache. And because I live in NYC it is really unrealistic to invest locally (I don't have several million at the moment to dump into a property).
Most Popular Reply
The only person(s) who should answer your questions about what state to form in and all that is your [hopefully investor-friendly] accountant, and maybe a real estate lawyer if need be. But your accountant should tell you all that. I can't imagine anyone on here knowing the for sure answer to that.
But more big picture than that, have you considered an umbrella insurance policy rather than an LLC or entity for asset protection? In my research, it's the much more advantaged way to go. Reasons here-
https://www.biggerpockets.com/renewsblog/2013/08/1...
Also will help you avoid the unavoidable $800/year fee if you create an LLC while you live in California.