How to protect my liability on rental properties in Illinois

[Joe Jackson]

I have about 5 rental units in Chicago,  that I own outright, along with a lot of personal equity. 

I'm planning on getting more rental properties but want to make sure my liabilities are in check and that I protect myself. 

I've looked at incorporating to reduce my liability, but we live in California and our units are in Chicago. I've been told that each unit needs to be it's own LLC, and you can't put all units under one LLC/entity? What we've done, which doesn't seem smart, is put everything under our Trust.. and then we have a big umbrella policy. (Doing individual LLC's for each unit is costly because of setup fees, filing fees, and tax accountant fees)

What do you guys suggest? 

[Sam Amir]

@Joe Jackson, I'm no expert, but we got insurance and formed a series LLC here in Chicago which is allowed in some states, Illinois being one. It allows you to have multiple properties under one main LLC entity and branches for subsidiary LLC's under the main entity. This is good if you know you're going to have a big portfolio. It'll save you money and time filing a new LLC for each different property and also a ton of paperwork.

Here's a quick definition: "Assets owned by one [LLC] are shielded from the risk of liability of other [LLC] within the same series LLC. A series LLC is similar in concept to a corporation with several subsidiaries."

Maybe ask your lawyer about that? Click here for more details.

Hope you're not sick of "LLC" haha.

Good luck!