LLC's: One for each property? How does it work?

[Jeff D.]

Hi there and thanks for taking the time to help answer my question.

While researching properties in my local market I've come to see that many properties are owned by LLC's solely dedicated to that individual property. For example 123 Main Street is owned by 123 Main Street LLC.

What I've begun to wonder is, when acquiring properties is their a parent LLC company that purchases the property and then transfers it to an LLC the investors set up named 123 Main Street LLC? Or during the closing process do the investors simultaneously file for a new LLC and then close on the property under this new LLC? And how would these investors obtain the financing for this new property if they are a newly formed LLC without a track record or history?

Thanks again.

[Bob Collett]

Jeff, I am not an attorney, and it is different in every state. Be sure to seek legal advice from and attorney. I am sure some NY attorneys will jump in soon.

That said, I typically put one or two properties in an LLC. I form the LLC ahead of time, so it sits as a vessel until ready. When I go for financing, the lenders look to me personally, my track record, my income, my net worth, etc. One other thing... here in Ohio, if I need to do an eviction or go to court for any reason, only an attorney can represent an LLC.

Good luck.