How many llcs' for rental properties?

[Harry Wiggins]

Hello,

i am putting my first multifamily deal together and it consist of three duplexes on the same street. Would it be better to own each duplex in a separate LLC or to put all three in one llc?

thanks

[Jonathan Taylor Smith]

@Harry Wiggins - There is no right or wrong answer to that question; however, many factors to consider - just a few of which are... In your state, what is the LLC creation and annual administrative, accounting and tax filing costs? Will you have debt on these properties? If so, that creates less need for separation and possibly a requirement for a single LLC if all under one loan. For example, if there is only 20 to 25% equity in the properties (that is a protection), there's nothing much for anyone to get in a lawsuit. And will you have both property and liability / umbrella insurance? Will you require tenants to have their own renter's insurance?

Personally, I keep multiple properties in a single LLC up to the point where the equity present of the combined properties (with some cushion) is at / above my insurance coverage amount(s).