how to insulate my llc and safe guard my assets?

[Zachary Mayo]

hello, this is my first post on bp. after reading Brandons book on investing I decided to take his advice and get on here and interact. my first question is how to properly safe guard myself. I do have an llc but currently the properties are not tied to it as I was told lenders do not like entities and could possibly foreclose on the property if I put them in right away. I currently have 11 units split between three properties and am working a private sale on another 3 unit this month. I was told by some investors to have a separate llc for each individual property as to create a great safety blanket, although for tax purposes this seems like a lot of unnecessary work. is there any benefit to this? is there another alternative or methods I could be doing to better protect my properties? should I roll the properties into the llc now that we got the loans already approved? any help would be greatly appreciated as this is only my third year as a private landlord. thanks in advance and I really look forward to meeting other investors that are further along in their journey and learn from them the best I can. 

[Nathan Gesner]

Don't fret over this too much. Most tenants sue because there's a dispute over the deposit, which means the most you would pay is 2-3 times the deposit. The odds of being sued are pretty small, much like dying from COVID. The odds of losing your case is even smaller. The odds of your loss being greater than what insurance would cover is even smaller. The odds of the loss being so great that you have to sell all your properties and head to the poor house? I couldn't even calculate the odds.

Your best protection is to know the law, obey the law, treat your tenants honestly and fairly. Then I would consider an umbrella insurance policy to increase coverage over all your properties. The last step would be to set up a legal entity.