Excuse me. I meant LLC, now I've noticed that home owners will own couple properties with each property being under it's own LLC for example John owns 123 Main Street and the records of the property shows John owns it under 123 Main St LLC so how would I do that to basically protect my assets meaning the properties. So can anybody explain the process of multiple LLC's per property.
Talk to an Attorney..it may or may not give you any protection.
Thanks @Charlie Fitzgerald now another question with a LLC is it possible to find the owners ?
An LLC would not protect the property, it would protect things that you own that are OUTSIDE the LLC. For example, if you own two properties and they are each in their own LLC, and a tenant in one property sues you for falling or something, they could obtain a judgment that places a lien on the property but they can't go after the property in the other LLC. Does that make sense?
And yes, it's super easy to find out who owns an LLC, as your name is on the paperwork when you file the LLC. Anyone searching on your state's Secretary of State's business website can find your name and address.
@Ray Agosto , there are some states, like Nevada that have series LLCs. Since my state does not have those I will not comment on them. A regular LLC can help protect you from liability, but there can be many situations where they do not. If you self manage they do not protect as much as most folks think. If you have an LLC and you have a rental and install a new water heater and mess the venting up and it kills or injures a tenant they will sue the LLC and you personally. It does not matter that the property is in an LLC because your personal liability lets them sue you personally. Same situation but you have a property manager and he hires a plumber to install the water heater and he messes up the venting and someone dies, they can only sue the plumber and the LLC or property manager. They cannot sue you personally. The big advantage of an LLC over a corporation is that if someone gets a judgement against you they can only get a charging order against the LLC they cannot get the LLC assets. Both a corporation and an LLC protect you from personal liability unless you do something to create personal liability. If someone slips and falls because your steps are in bad shape and they sue the LLC and win they can still take the property from the LLC, but cannot get the assets of the owner not in the LLC. It is often a big game to try to find a way to hold the owner liable personally. Like he KNEW that plumber was a drunk but hired him anyway to save money, so the manager should be personally liable, etc.
I do not like separate LLCs for each property. If you have 10 properties that means 10 different bank accounts, 10 different sets of books each month, 10 separate tax returns, 10 separate annual state filings, etc.
Agree. It's dissembling.
@Patsy Waldron Thanks I'll look into finding the own of a LLC because I wanna reach out and see if he had free time to hopefully teach me a little something something
@Jerry W. thanks for the response it does sound exhausting having 10 LLC for each of your 10 properties. So from experience would you prefer to just have one LLC for all properties ? And if they sue the LLC for one property it wouldn't effect the rest ?
Suing the LLC will effect all the properties in the LLC. Just get a high liability amount on your insurance. Sometimes putting all of the properties under one policy will save you money. The cost of trying to run 10 companies will be much higher than buying a really good liability policy.
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