16 Condos: How Many LLCs?

[Britt Griscom]

We own 16 condos in the same complex in New Mexico. We have divided them into two NM LLCs. Would you create more LLCs to further segregate the liability? Would you create Wyoming LLCs instead of NM LLCs? Would you use a series LLC?

Thanks.

[Andy Mirza]

Sounds like a lot of extra work. The first line of defense against liability issues is an adequate insurance policy. If you want more liability protection, buy more insurance coverage. My business partner and I have 21 condos in the same LLC and have individual policies for all of them. Maybe we could do better with an umbrella policy but that's what we have.

If a motivated, suing attorney gets past your insurance company and their lawyers, he'll try to pierce the corporate veil of whatever entity you're using. IMO, I don't think it would matter if you had 1 or 16 different LLC's. I think the time, money, and effort to set up more than one LLC would be better spent on other investing activities. Just my opinion. No legal advice given. Hope this helps....