Criteria for new LLC
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?
Most Popular Reply
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).