How many properties per llc

Question

How many properties in each LLC do you hold.  One per llc? Or more?  Can tenants sue funds from other properties in llc?

John Underwood · Answer

Depends on your risk tolerance. This just came up last night at my local Real Estate Club meeting where 2 attorneys where answering questions.

You can put 3 properties in one LLC or just one, you could put put 500k worth of properties per LLC. You can put a couple of lower end properties in one LLC and nicer more expensive once in a single LLC. Its all up to your risk tolerance and how much you want to spend on it.

In my state it only costs $110 per LLC on the Secretary of State site to create an LLC, and there is no annual fees to maintain it. You should have an attorney create your Articles of Incorporation and Operating agreements. Then you need to get an EIN and a business bank account. At least pay for the 1st set and then copy and paste if they are essentially the same minus the LLC name difference. This is what would typically be done but their are variations to this.

If a tenant is in a house owned by an LLC then normally they can only sue that LLC and what it owns. This is as long as you are operating the LLC correctly in the first place.

Lines of defense before creating an LLC:

1. Mortgage on property

2. Insurance on property

3. Possibly an umbrella policy

4. Treat your tenants fairly and take care of your properties.

Caleb Heimsoth · Answer

@Luke Saglimbeni. The people I know with a ton of property (hundreds of units) seem to put 20-30 residential properties per LLC

Ginger G. · Answer

@Luke Saglimbeni

The really cost of setting up any entity is not just the cost of the state fees but the legal costs of the LLC agreement and yearly tax return filings. These costs can be greater than the state filings.

Account Closed · Answer

@Luke Saglimbeni

Watch this

https://youtu.be/XdSp5GXbiE4

Dennis M. · Answer

Use land trusts instead and make your company llc the trustees and or beneficiaries

Ned Carey · Answer

@Luke Saglimbeni you've gotten some good advice here. Keep in mind that there is not just a monetary cost to LLCs, there is an efficiency cost. It takes time and effort to run multiple LLCs.

We have two LLCs for our rentals. That works out to 5 each. My guess is if we get to 10 properties in an LLC we will consider opening another one.

Basit Siddiqi · Answer

@Luke SaglimbeniThe answer to your question is going to depend on your situation and risk tolerance.1) Are you a risky person? You may be open to having more properties within an LLC.Are you not a risky person, you may want to having less properties within the LLC.2) What is the cost of each property?You may want to separate properties that have high values within their own LLC.On the other hand, it may be okay to have a couple low value properties within the same LLC.3) How risky are the properties?Are you investing in risky/dangerous areas where renters may be prone to sewing you?or are you investing in safer less dangerous areas?4) do you have other investors in the deal? If you have other investors in the deal, you may want to consider you being more safe in thee situations to risk losing relationships with investors.You may want to consider sitting down with an attorney to ask for his feedback and recommendations.

Costin I. · Answer

@Luke Saglimbeni - you can have one or more per LLC, and that depends on multiple factors:- property class - you might not want to mix A class property with a D class property in the same LLC, due to different tenant level- cash flow - you might want to keep your cash flow cow separate from the ones that barely produce- equity - you might want to keep the one with large equity in its own LLC while you can group the ones with little equity in another LLC (let's say you have one with 50K equity in its own LLC and 3 other each with only 10K in another LLC, till their equity grows to your risk threshold when you move them out in their own LLC).- number of units (in the case of MF)- location of real estateThe investor has to decide what mix is optimal for their situation.

You should also look into these threads - 593044-separate-llc-vs-one-llc592496-break-portfolio-into-multiple-llcs597657-should-you-form-a-llc-for-each-individual-rental-property648640-how-many-properties-do-you-have-in-your-llchttps://www.biggerpockets.com/...

Keith A. · Answer

not sure what state your in, but some, such as Texas allow for a Series LLC which means you have one LLC, with each property in its own cell. Each cell is protected separately.

David Disraeli · Answer

The series LLC/umbrella is a great combination.  However only certain states offer the series and if any LLC is set up in one state and operating in another state - it must be registered in that "other state".  Depending on how many states are involved it may or may not be beneficial to set up a series vs a traditional llc.

How many properties per llc

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