All Forum Posts by: Scott Smith

Hey @Christen G., just ran across your post about multiple LLC's and wanted to provide my input! I completely understand the hesitation creating multiple LLCs - with multiple filing fees, multiple bank accounts, etc - it can create quite a headache!

My law firm actually specializes in asset protection and we typically recommend a Series LLC - which involves a "Parent LLC" and multiple "Children LLC" - each of which have their own property, shielded from the liability of the other "Child" LLCs. The benefit of this is there is only one bank account for the entire Series LLC (as long as you keep accurate accounting records!). Further, this business entity form can be expanded when each new property is acquired. When combined with an anonymous land trust, this form of asset protection can provide both limited liability for your properties and anonymity in all of your purchases.

If you are interested in learning more, my podcast here on Bigger Pockets would provide some helpful information.

Hope this helps!

Hey @Alan Gaber, the utilization land trusts can be a great tool for remaining anonymous in real estate transactions. However, it is really only useful in the broader context of asset protection when paired with a business entity that can limit liability for your properties. 

My firm actually specializes in this exact area of law. Have you heard my podcast on Bigger Pockets? It may answer some of your questions regarding land trusts and how they can be effectively utilized as part of a broader asset protection strategy. 

Hope this helps and best of luck building your Real Estate empire!

Hey @Keith Meyer. I'm glad you are interested in creating a Series LLC. I personally believe it can be one of the best ways to protect your assets, while also providing anonymity to real estate investors.

In fact, my firm specializes in this exact area of law. Have you listened to any of my podcasts on Bigger Pockets? If not, I would definitely recommend listening to the podcast. It is full of valuable information that I think would help answer your questions. 

@Tiffani T. The key here is to be proactive rather than reactive. Insurance only covers so much. With a Series LLC structure, you're further protected from lawsuit by an anonymity component, do not have to pay fees on multiple separate LLC's, and have the ease of simply adding properties as you go.

Through the Series LLC structure, there is one "parent" LLC that can then create any number of individual "child" series beneath it, each holding one property per. With you having two properties with the intent to add more, this could be really useful for you.

Each property is purchased in your name and transferred into the Series LLC after via a trust, which establishing anonymity.

If you are interested in learning more, you can find information here and here.  And if you have any additional questions, do not hesitate to reach out.

Thank you and good luck!

@Joseph Watson Looks like you have done your homework!  Great first step!  I always recommend to be proactive, rather than reactive.  It's never too early to think about asset protection.  The good news - there are several options out there and you can find the one that works perfect for your real estate portfolio.  One thing I will mention is when looking at asset protection, always think about your goals and where you want to be and ensure your asset protection will grow with you.  LLCs, Series LLCs, and trusts are all good places to start when thinking of asset protection.  You can find more information here, here, and here. If you have any questions, please feel free to reach out!

Best of luck with your real estate investing!

@Costin I. Thanks for the mention!  As always, I really appreciate it.

@Laura Sulak If you were able to listen to the podcast, I hope you enjoyed it and found it informational.  If you have any questions, feel free to reach out.

Best of luck on your endeavors!

@Costin I. Thanks for the mention!  I really appreciate it! 

@Marvin Lee If you were able to listen to the podcast, I hope you enjoyed it!  If you have any questions, please feel free to reach out.  

Thanks again and best of luck!

@Patricia Smith and @Costin I. Apologies on the delay! I just wanted to thank you both for the kind mention. Regarding the Clayton Morris podcast, you are correct that each property you own should be in a separate LLC. However, this can be accomplished through a Series LLC. The Series LLC acts as an umbrella, a parent of sorts, and can create individual child series that are treated as separate entities. Each individual child series would then hold a property. This eliminates the need for costly filings for multiple LLCs and allows you to separate your properties. Instead of your properties being in one big pot, they are now in separate bowls. If you would like more information, please reach out. Thanks again!! And good luck on your endeavors!

Hi Justin the DST can avoid franchise taxes in CA if structured properly (something my firm specializes in). You only have to have a DST if you're going to be owning CA real estate with it. I don't see the FTB pursuing foreign LLC's owning foreign assets (outside of CA = foreign) just because one of the members is from CA.

The bank accounts can be tricky, we had to develop relationships with bankers to refer clients to. 

For the book keeping, you should keep track of the books separately for each of the individual series.

@Jeremy Woods Thank you for the shout out!  And thanks for listening to the podcast. @Juan Pablo Murillo  Yes, anonymous trusts, if done correctly, can be used to protect real estate without violating the due on sale clause.  You can read more about the trusts here.

In addition, to add to the protection, add an LLC or Series LLC structure in conjunction with the trusts. If you have any more questions, message me, I enjoy discussing these topics.

Thanks and best of luck!