LLC / legal set up of your rentals

[Dzenan Catic]

Hi guys,

When you put your property in an llc , do you make sure that everything is in the Llc’s name (Insurance, mortgage, all the lease and rental paperworw, etc.) ?

Also, when you have multiple properties, how would you go about setting that up? A book I read suggested that you should have every property have its own llc and bank account. Seems pretty tedious and tough to keep track of when you have 10 or so different properties. Can you have them all in separate Llc’s but have a group llc that owns those Llc’s and then all of your leases and expenses go through that group. 

For example:

Property1:123 main st Llc

Property 2: 456 main st llc

You form “main st capital” . Main st capital owns both llcs and then all of your lease agreements say “main st capital” on them and your rent collection all goes through main st capital as well as expenses and everything else. You pay your mortgage through main st capital for all Properties and such. Does this still protect you from piercing the corporate veil? 

[Mike S.]

@Dzenan Catic

One often discussed setup is to have each property in its own LLC. Each LLC is owned by a WY holding LLC.

The WY holding LLC gives anonymity and charging order protection to all the other local LLCs.

Then you can have a separate company or corporation that is doing the property management for all the properties. This entity will sign leases, collect rents and pays property taxes, utilities, repairs on behalf of the property LLC. Every quarter the management entity will pay the property LLC the NOI minus its management fee.