Transitioning rentals to a holding company LLC

[Eddie C.]

Hello All,

I had a couple questions regarding the best way structure and form the LLCs for my rental properties…….and some of the logistics behind it. I currently own 2 rental properties under my own name (w/ an umbrella insurance policy). My plan is to form an overarching holding company LLC and then place each of these properties as their own entity LLCs under that.

• Does it make any difference if I form the holding company before the individual LLCs to hold the properties?
• When I purchase future properties, would I purchase under the holding company and then move those properties into their own LLCs under that? When I look for commercial financing, I'd assume I could get better terms under the holding company (which would have a history of + income) rather than a newly formed LLC with no history.
• When I travel to look at properties out of state, or spend money on general real estate expenses not specific to any one property, would I just capture those under the holding company? If I didn’t form a holding company, how would I have captured these general expenses?

My goal is to maximize liability protection while allowing for the flexibility of a larger future portfolio. I would appreciate any advice you have. Thanks in advance!