How many properties to own under LLC

8 Replies

Hello All !

I'm forming an LLC with another partner and I know that a single person can have 4 to 5 properties under his name when going through a standard mortgage process that is reported to fannie mae and freddie mac (aside from portfolio loans).

I was wondering, when we purchase a property under an LLC, do we have similar limitations for the #of properties to own, or is it different? if it happens that we reach around 10 properties, how we will expand that number, or better ask, what is the best strategy that allow us maximum number of properties to own?

To Note: this is for buy and hold strategy, BRRRR may apply in some cases.

thanks!

Tamer

Hello Tamer,

When purchasing properties in LLC, there are no limitations to how many financed properties. Most national portfolio lenders have no limitations. If you go to a local bank, they may only allow a certain number based on their comfort level.

There are a lot of different thoughts on this, but I think you should just get good insurance and run your business above board. Having 10 different LLC's or whatever just becomes a big mess.

Originally posted by @Andrew Syrios :

There are a lot of different thoughts on this, but I think you should just get good insurance and run your business above board. Having 10 different LLC's or whatever just becomes a big mess.

 Thanks Andrew, and Bob! I got a very similar feedback from another expert. I will just take it step by step and deal with it when I hit a wall. The good thing is that there are different options available. 

@Tamer Y. Hi Tamer! I would also consider the the value of your LLC. How much are you willing to lose if something goes south? So maybe you add properties in the same LLC until you reach your max equity value that you are comfortable with then start another LLC. Hope this is helful. Sincerely, Annie Levan

@Annie Levan , nobody wants to lose, right? I'm planning to talk to the insurance company and see what they advice, as they might have a plan to cover me in those cases without affecting other properties I own. 

@Tamer Y. I think it is best to form a parent LLC as an umbrella with LLCs under that you would form for each property. It may take a little more money and management but you would have great protection in the event of being sued.

@Sabriya Morris Yah I 100% agree ! that is the long term plan, is to have a holding company (LLC or C-Corp) with the rest of LLCs under it as non income producing LLCs. But for starters, this structure is not needed.

Another way to contain risk (if available in your state) is a series LLC. This is what we have--one "holding company" or master LLC and then a series for each property or group of properties. This is more efficient than individual LLCs for every property but still isolates liability. Once the master LLC is set up, the filing fees and attorney costs to add a series are relatively inexpensive.