LLC options for my portfolio

[Reed Andrews]

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

[Ashish Acharya]

@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.