LLC Structure for Out of State Rental Properties

[Jeff Howard]

Hello,

I will be purchasing investment rental homes in the near future and have been discussing entity structure with my tax adviser. I will likely be buying in Indianapolis and Birmingham. I will open an LLC for each property for maximum protection at this early point in the game (I know there is a lot of different thoughts and opinions on this!). I obviously want to start taking maximum deductions right away via my allowed business expenses involved in my real estate activities. To do so, I want to start off well organized and open a business bank account and credit card for my real estate business. That being said, if I have multiple LLC's for each property, would it then be best to open a "master" LLC in a tax friendly state like Wyoming or Nevada in order to use that business for my bank account and other general business expenses and activities? I have also heard that this might be a good way to simplify the year end 1099/K1 process and to have only one return at the end of the year, with the single member LLC's flowing through the "master" LLC. I also have a revocable living trust, that I would use as the single member on the LLC's for each property. Ugh, this is the super fun part of this whole thing! Hopefully this ramble made some sense. Any advice is appreciated. I should probably also read the tax book by @Amanda Han! I bet she touches upon this in her book.

Thank you! All the Best.

Jeff