All Forum Posts by: Richard Bechtol

Hi Ashana,

There are a few ways to accomplish what it appears you are discussing here. One way would be to create a Series LLC that has child LLCs underneath it and having Land Trusts underneath each child LLC. This is a good plan if you have multiple properties because you can have liability protection by compartmentalizing each property under a child.

The Land Trust interests with the child series owning each land trust allows you to not need to register as DBA in each state. Additionally, you can also have anonymity by having a nominee trustee under each land trust. This makes tracking the individual owner of the property very difficult and can stop the possibility of a lawsuit before it even starts.

I hope that helped answer your questions.

Hi Sachin,

When creating a Series LLC there needs to be very specific language included in the initial formation documents of the LLC. You cannot create an LLC just as you would any other traditional LLC and then create children underneath of it. If this language is missing you will either need to create a new LLC to be the parent or use a hub and spoke model.

Hi Angel,

Another option as a California investor is to use a Delaware Statutory Trust as a holding company. This would allow you to avoid paying the pesky CA Franchise Tax on the entity while also allowing you to scale the business if that was what you ultimately ended up doing. This would also address any issues with the partner as well.

Hi Austin,

There are different ways to get the LLC with anonymity created and also ways to compartmentalize the properties if you do plan to scale. In addition you could also create another LLC that acts as a management company and as long as you have properly executed property management agreements you are not going to have the veil pierced as long as there is not co-mingling going on. I know there are a lot of opinions both ways about this so I always tell people if it is something you care about then do it. There is not a one size fits all plan for everyone. I hope this helps and let me know if you have any questions about it.

Hi George,

There should be no issue with this because a Revocable Living Trust that you create is treated as if the property is still in your personal name.

Hi Joe,

You would typically want to seek advice from an accountant on if a s-corp is right for you but an LLC can be treated either as a disregarded entity or can elect to be taxed as a s-corp. Some people elect for the s-corp status but it really only helps once you reach a certain income level.

Hi Max,

I think that something to kind of "split the difference" so to speak could be a series llc. This allows for you to create multiple children underneath one parent llc. This allows for compartmentalization of the properties without the complications of having so many llcs. I hope this helps.

Hi Krissi,

Some things to think about in your situation are in regards to scalability and also the fact you live in CA. CA has fairly strict rules when it comes to franchise taxes and you would need to pay that for each LLC because you live in CA. However, a Delaware Statutory Trust might be a good option for you because it legally avoids the franchise tax issue and also allows you to scale your business without creating a new LLC every single time you acquire a property. I hope that helps!

Hi Arron,

I think that it might be a good idea to look into an LLC. One thing to remember is that an LLC is for liability protection and as you scale you increase your risk level. You can look into a Series LLC as well to help in terms of scaling and not having to create a bunch of new LLCs each time you acquire a property.

Hi Jake,

There are a few ways to accomplish what it appears you are discussing here. One way would be to create a Series LLC that has child LLCs underneath it and having Land Trusts underneath each child LLC. This is a good plan if you have multiple properties because you can have liability protection by compartmentalizing each property under a child.

Additionally, you can also have anonymity by having a nominee trustee under each land trust. This makes tracking the individual owner of the property very difficult and can stop the possibility of a lawsuit before it even starts.

I hope that helped answer your questions.