I live in IL and am investing in Wisconsin. I created a series LLC with 3 properties in it. I am going to create a new LLC (not a series) or add a series to my LLC but I have heard conflicting viewpoints. Some people say its perfectly safe, while some people have said to run away if anyone offers this. A series saves me a few hundred dollars a year in fees to the start per/LLC. I also have my account with Chase and they wont give a second checking account under a new series LLC. Anyone have any recommendations?
You can go either way.
Since the bank says that you wont be able to open another account then that will be a pain in the ***. You may have to go to another bank to open another bank account. That's if you want to do all of that.
@Larry Frank I've had this conversation many, many times with different investors. I'm a 'less is more guy' that has a few entities but also has a lot of property in my personal name. I think attorneys talk people into creating way more entities than they should.
As proof of this I would offer this challenge. Look up the few largest holders of property in your county or surrounding counties. You will be surprised to see how many are just some guy like Joe Propertyowner. Call them up and ask how many of them have been sued by a tenant. Of those, ask how many suits went beyond their insurance coverage.
I think you will find that quality landlords that operate correctly do not get sued very often so advanced entity structuring is not cost effective.
Listen to the most recent Biggerpockets podcast on tax issues. @Amanda Han has a great quote on there. She's being diplomatic but her advice is right on.
Every decision to start an entity should be a cost-benefit analysis in terms of how much it will cost in filing fees, accounting, etc versus what it may save you in potential future litigation.
I completely agree with the above. That said I do utilize a series LLC. I also bank at a local credit union as opposed to chase. It depends upon preference. Chase is incredibly difficult and will not issue accounts to series LLCs.
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