Criteria for new LLC

[Tina Wicks]

For protection purposes, we've created a LLC and had properties transferred into them. But since we've grown, I'm feel I should create a 2nd LLC and put half of the properties in the 2nd one. Does anyone have a rule of thumb they use on when it's time to create another LLC? Is it based on the # of properties or the value of the assets? Is there a down side to having multiple LLCs?

[Charles Carillo]

@Tina Wicks

It really depends on your total net worth versus the equity in the properties. My asset protection attorney suggests doing one for every $500k of equity. For apartment complexes or larger properties, you would do one LLC for each property. If they are single-member LLCs, they flow through, making tax preparation much easier (and less expensive).