I am relatively new to the real estate investing world. My husband and I have only been investing since July, but since then we have obtained 12 properties and 5 lots. We have been so busy buying that we have unfortunately skipped over the LLC process, so every property is in our name. We need to establish an LLC as soon as possible, but I have a few questions first.
First of all, we are having a hard time coming up with a name. Is it wise to include your last name in the LLC? I thought legally the idea behind an LLC is to exclude yourself from the company. Including your last name in the business name seems counter-intuitive, but I know many investors do it. What is your thought on this?
Secondly, of the 12 properties we own, 10 are single family homes, 1 is a condo and 1 is a 4-plex. Should we have individual LLC's for each property and one managing LLC for all? Or, should we have an individual LLC for the 4-plex and all the others as one LLC? What are the pros and cons to having multiple LLC's? What are your thoughts on having an individual LLC for each property and one managing LLC for all properties? Does it become incredibly complicated?
I'm looking forward to your responses! Thank you in advance!
If you are holding rentals I don't think the name is important unless you have enough rentals (several hundred to several thousand) that having a "brand" would be a value.
I would avoid your name in the company name. I also avoid long names. Writing Ned Carey, managing member, Innovative Management and Real Estate Acquisitions of Maryland LLC gets VERY tiring after about the second addendum of a contract.
I would just put them all under one company. Having multiple LLCs mean paying multiple yearly renewal bills. Most people separate rental property and flips into different entities. Don't use your name because you want privacy when someone does an asset search. I like to make my companies sound local like DC Capital LLC or use the address as the name ie 3806 Maple Drive LLC. Congrats on your rapid success.
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