Amateur looking to be legitimate income

[Seth Meyer]

I have slowly bought 5 properties since 2009 and am a Financially conservative investor, but am at the point that I realize I need to get more aggressive and grow. I'm look for advice from those who essentially went from zero to hero, and how they were able to find and purchase all their properties without overpaying for them. What did you do for financing after you ran out of cash? How do you have your LLCs and trusts structured for liability and minimal tax preparation costs?

[Philip Barr]

As far as the LLC side, it is important to separate each property into its own LLC. Part of asset protection is compartmentalization. If you put all of your eggs, or in the case rental properties, into one basket, then you risk losing them. Each LLC should be set up in the state where the property is located. This gives you the ability to enforce your rights in that state since the entity is recognized, such as eviction. To provide protection against personal liability, it is best to have a holding company own the LLCs instead of you personally. A WY LLC works really well for this, considering its strong protections against personal creditors.

You would not have to file any extra tax returns with this structure. You can have the LLCs be disregarded to you tax-wise. This is passive income that can just flow down to your personal return.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.