Developer · Cleveland / Akron, OH · Member since 2008 · 922 posts · 399 votes
I am just looking to expand my holdings to the point where this matters.
If you hold your investment properties in a company (LLC or whatever), do you hold all of them in the same company? or do you have multiple companies in order to not expose all of your portfolio to the risk of falling to a single lawsuit?
i know it is logistically less desirable, but is it a good idea?
While I personally don't like to hold properties in companies, the people I know who do tend to suggest roughly $500K equity per company as a happy medium between getting too complicated and spreading around the risk.
We are a avid fan of using LLCs to hold our property for a number of reasons: 1) The liability issue, so we hold about $5 million (approx 20 to 50 SFHs) per LLC as a way to place a firewall between all of our holdings; 2) We use it as a way to concentrate our holdings for easier tax filings (ie, our FL LLC only holds FL property); 3) Investor ownership to allow each investor to be segregated in what they actually own. (When we raise funds from investors they know what and where they are buying)