I have a number of rentals in multiple states. Currently, all of them are held in my name. I have landlord insurance on all properties but now i'm trying to set up proper legal entities to protect my assets further.
I've looked through the forum to see the advices on LLC (single vs. multiple). I'm drawing to the idea of separate holding and operating llc. I came across this article
which made this setup very compelling to me. Excerpts below
- "an operating entity that has possession of the assets, but does not own the assets (unless they are encumbered in favor of the holding entity or owner), and
- a holding entity that actually owns the business's assets.
Using holding and operating companies is an asset protection planning strategy that helps to limit liability in your business structure. As noted earlier, the ideal business structure consists of an operating entity that does not own any vulnerable assets and a holding entity that actually owns the business's assets. With this structure, the small business owner can eliminate (or, at the very least, substantially limit) liability for both business debts and personal debts."
This seems to be easier to maintain and operate than multiple llc, and offers additional protection.
Anyone has experience with this? What are the gotchas?
Take a look at this thread.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing