Separate LLC for RENTALS and FLIPS

[Justin Eaton]

Hey Guys! I have a question regarding LLCs. I currently have an LLC, which i have bought and sold all of my flip properties under. After investing in flip properties since January 2013, i have decided to get in to the buy and hold game.

I was planning on setting up a separate LLC from the existing flip business for all of the rentals that i acquire to keep things completely separate between the flips and rentals. The key thought behind it was to keep the rental assets protected from any law suit that my come up during future flips. This seems like the most logical thing to do and i am looking to hear from some investors who have done it this way or have done it another way and their reasoning for doing so.

Thanks and happy holidays! 
Justin 

[Bill Hampton]

Flips should be held in an LLC taxed as an S Corp. Buy and holds should be held in a separate LLC for optimal tax benefits.