forming my first entity
Ive been doing RE investing for about 3 years now and I have 4 SFR in 2 states. I plan on buying more this year. It is my goal this year to start to operate more professionally so I can continue to scale my business. Up to now I have been keeping my books in excel and all my properties are in my name with conforming financing. This has worked well, but I have two goals. 1) make sure Im operating in a way that protects me from liability 2) be as hands-off as possible
I have parsed through threads here on BP, read asset protection books, and talked to my accountant and various lawyers. It seems there is still no clear path for me. In my mind a great outcome would be a situation where I have an entity/entities holding and managing the properties. The day-to-day operations would be handled by local property managers, and monthly books kept by an hourly book keeper. That way I can focus on sourcing and acquiring new deals (and my day job). I can do some annual formalities for the entities and my accountant can file taxes from the books kept by the book keeper.
Unfortunately I haven't been unable to find anyone in my personal network who has been able to advise me to my satisfaction. I was able to get a referral to a RE attorney in Kentucky but their help was limited as they typically work with local investors on larger commercial deals.
I live in California and work at a tech company. I have taken on RE investing as a hobby and a way to invest windfall earnings. I have learned a lot being involved in the nitty gritty of buying foreclosures from out of state and getting them rented out. I own two houses in California (5 hours away from my home) and two in Indianapolis also. I am aware there are potentially better markets but I have worked hard to establish networks in both of these places. Unfortunately my network hasn't yielded much help in the way of entities or asset protection. Part of that might be because I don't know how to ask the right questions and Im shy asking around at my day job for that kind of referral.
Currently my best guess looks like holding title to the properties in individual revocable trusts and the beneficiary of the trusts can be an LLC. This seems to be the best compromise for cost/protection/complexity. I am aware of the LLC tax in CA. Its possible I would only hold the California properties in a trust and skip the LLC (but cant I change the beneficiary without any public filing?). The LLC would be formed in a state where taxes make sense and probably charging orders are the only creditor remedy, even though there is a chance other state's law could apply. I would conduct company business only while I am not in California. I travel often.
Am I on the right track? Can anyone offer suggested reading or a real life example of something similar to my situation? I feel like my situation is not complex or unique.