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User Stats

19
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8
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Mike Hoover
  • Rental Property Investor
8
Votes |
19
Posts

Entity structure for multiple properties

Mike Hoover
  • Rental Property Investor
Posted

Hey BP,

Currently a partner 50/50 and I have a dozen properties under one LLC. Buying another 30+ units (7 seperate properties all in PA) and I'm going to split them up into 3 additional LLCs but wanted to add an additional structure on top of those 4 and make the 3 new ones SMLLC owned by a Wyoming LP. See attached structure. I'm good with having four separate bank accounts and separate filing but wanted to get feedback and thoughts on this entity structure.

I would say personal asset protection is #1 but lower cost is a strong #2.   We both have high W-2 income and own all our properties clean and clear.   

User Stats

14
Posts
8
Votes
Sean Macneir
  • Lender
  • Fort Myers, FL
8
Votes |
14
Posts
Sean Macneir
  • Lender
  • Fort Myers, FL
Replied

I’m no attorney but this looks sound. Holding company over separate entities is what I see common with the investors I work with. LCC as a basic pass through and limited partnerships depending on equity arrangements and profit share of the parties add that extra level of flexibility and not needing to split potential individual partner costs or liabilities.  

User Stats

772
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1,196
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Stuart Udis
Pro Member
#3 Buying & Selling Real Estate Contributor
  • Attorney
  • Philadelphia
1,196
Votes |
772
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Stuart Udis
Pro Member
#3 Buying & Selling Real Estate Contributor
  • Attorney
  • Philadelphia
Replied

@Mike Hoover I believe you left out the Cayman Islands bank accounts, perhaps just an oversight :) 

  • Stuart Udis
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    User Stats

    14
    Posts
    8
    Votes
    Sean Macneir
    • Lender
    • Fort Myers, FL
    8
    Votes |
    14
    Posts
    Sean Macneir
    • Lender
    • Fort Myers, FL
    Replied

    @Stuart Udis hahaha 

    User Stats

    4,300
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    3,982
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    Jerry W.
    Pro Member
    • Investor
    • Thermopolis, WY
    3,982
    Votes |
    4,300
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    Jerry W.
    Pro Member
    • Investor
    • Thermopolis, WY
    ModeratorReplied

    Just make sure the general partners are a corporate entity, not you personally.  Otherwise there is no reason to add the partnership.

  • Jerry W.
  • User Stats

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    Chris Seveney
    Pro Member
    • Investor
    • Virginia
    14,290
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    16,753
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    Chris Seveney
    Pro Member
    • Investor
    • Virginia
    Replied

    @Mike Hoover

    100+ assets - one entity. Never have had an issue.

    If they were commercial assets then different LLC's make sense. For residential - just making it more complex come tax time.

    If you have different partners - yes different LLC's then as well.

    If I could collect the amount t of money people on BP spend for belts and suspenders for so called corporate protection and confidentiality I would be a billionaire

  • Chris Seveney
  • User Stats

    71
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    31
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    Cory St. Esprit
    • Investor
    • Pittsburgh, PA
    31
    Votes |
    71
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    Cory St. Esprit
    • Investor
    • Pittsburgh, PA
    Replied
    Quote from @Mike Hoover:

    Hey BP,

    Currently a partner 50/50 and I have a dozen properties under one LLC. Buying another 30+ units (7 seperate properties all in PA) and I'm going to split them up into 3 additional LLCs but wanted to add an additional structure on top of those 4 and make the 3 new ones SMLLC owned by a Wyoming LP. See attached structure. I'm good with having four separate bank accounts and separate filing but wanted to get feedback and thoughts on this entity structure.

    I would say personal asset protection is #1 but lower cost is a strong #2.   We both have high W-2 income and own all our properties clean and clear.   


     What's the benefits on a Wyoming LP