LLC options for my portfolio

Member since 2022 · 1 post · 1 vote

Hi there!

I'm a homeowner in the Dallas area and am looking to get started on my first BRRR once all of my ducks are in a row. I was looking for advise on the best way to set up an LLC for this purpose. I currently own a small business (S corp) but am unfamiliar with which LLC would be best for my future real estate portfolio. I've heard some people setting up an LLC for every property they add.

Any advise would be appreciated

1 Reply

21 views

Most Popular Reply

Ashish AcharyaBusiness Member

CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes

@Reed Andrews For your first BRRRR in Texas, the most practical approach is to form a single-member LLC (or multi-member if partnering). Texas offers strong benefits—no state income tax and no franchise tax under $1.18M. Keep this LLC separate from your S corp, as real estate investing should not be mixed with active business income for tax and legal reasons.

Starting with one LLC is smart and manageable. As your portfolio grows to around 3–5 properties, you can scale by adding:

Separate LLCs for each property,
A Series LLC (Texas supports this), or
A holding company with multiple LLCs beneath it for streamlined management and liability separation.

An LLC provides personal liability protection and simplifies financial and tax reporting. You'll still need landlord insurance and possibly an umbrella policy. For taxes, most rental LLCs are taxed as disregarded entities (Schedule E) or partnerships (Form 1065). Avoid S corp status for rentals—it disallows depreciation and passive loss benefits. A real estate CPA can help you track deductions and consider strategies like cost segregation or bonus depreciation to lower your tax bill. Start simple, then scale with the right structure and expert support.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

[email protected]941-914-7779

INVESTOR FRIENDLY CPA®5241 Reviews

Website View Page

TaxMD® | Tax Planning Software

Website View Page

1 Reply

See this reply in the discussion

5 Replies

Jump to latestLatest

Sort by

Account Closed
Accountant · NY · Member since 2025 · 39 posts · 41 votes
1y
You can typically set up an LLC on your own if you're comfortable with the documentation. If not, hire a CPA or attorney and they should be able to do this easily. People typically set up an LLC for each property they own. It keeps everything separate and liability is typically limited to the assets within that LLC. It keeps everything clean for operations and tax time.
0 Reply
Fulton Abraham Sanchez
CPA| New Clients Welcome| 50 States · Member since 2016 · 440 posts · 93 votes
1y
@Reed Andrews, hi. Setting up your structure right from the start can save you major tax and legal headaches down the line. For BRRRR investors, forming an LLC can help protect assets, but whether to use one per property depends on your risk tolerance, financing plans, and long-term portfolio goals.

Also, since you already have an S corp, it's important not to mix real estate with active business income—two very different tax treatments.

Happy to share more insight if you'd like to dive deeper into the best setup for your goals!
0 Reply
Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
1y
I think it depends on what your goals are and how you plan to use the LLC.
I'm not an attorney or a CPA, so go to them for appropriate advices, but from what I see probably 90% of what people think they want to accomplish are not done with their LLC.
When Big Bob creates Big Bob LLC, no anonymity there. Whey they don't pay a registered agent to "save money" and use their home address, no anonymity there. When they sign in their personal name and use their personal bank account no anonymity there and you just comingled your assets, so likely no asset protection there. Don't file you state tax or registration every year, then you lose the LLC status and that can cause you all kinds of problems. Put a property in LLC and you may no longer be allowed to use JP court for evictions pro se. Some courts require all LLCs to use an attorney. You'll probably want a CPA to help you stay compliant, so you add to expenses there. You typically need to have at least one general meeting a year and have minutes....and probably a dozen or 100 other important things you need to do to accomplish what you think you want to accomplish.
For most small investors with 1-2-3 properties, the benefit I see is if you have a family. You could potentially pay them and set up retirement plans for them, Roth IRAs and the like. Take an expense on the LLC business and get the family started on investing. Your CPA could probably tell you the best way to do that. Of course you also have to think if the BRRR or whatever investment will throw off enough cash to do that.
0 Reply
Preston DeanBusiness Member
Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
1y
Hi @Reed Andrews
I can connect you with some folks who have done something like this in the DFW area. I'll send you a connection request.
[email protected]817-480-9452
United Real Estate DFW Properties 565 Reviews
Website View Page
0 Reply
Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
1y
@Reed Andrews For your first BRRRR in Texas, the most practical approach is to form a single-member LLC (or multi-member if partnering). Texas offers strong benefits—no state income tax and no franchise tax under $1.18M. Keep this LLC separate from your S corp, as real estate investing should not be mixed with active business income for tax and legal reasons.

Starting with one LLC is smart and manageable. As your portfolio grows to around 3–5 properties, you can scale by adding:
- Separate LLCs for each property,
- A Series LLC (Texas supports this), or
- A holding company with multiple LLCs beneath it for streamlined management and liability separation.
An LLC provides personal liability protection and simplifies financial and tax reporting. You'll still need landlord insurance and possibly an umbrella policy. For taxes, most rental LLCs are taxed as disregarded entities (Schedule E) or partnerships (Form 1065). Avoid S corp status for rentals—it disallows depreciation and passive loss benefits. A real estate CPA can help you track deductions and consider strategies like cost segregation or bonus depreciation to lower your tax bill. Start simple, then scale with the right structure and expert support.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
[email protected]941-914-7779
INVESTOR FRIENDLY CPA®5241 Reviews
Website View Page
TaxMD® | Tax Planning Software
Website View Page
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.