Entity structure for scaling rentals and flips

[Ben Wagner]

I'm curious how some of you structure your businesses. We're looking to create an entity structure that will support owning 100+ rentals and doing 30+ flips/yr with a handful of staff members.

Right now we're thinking of having: 1) An LLC that owns a series of Single Member LLCs that each own a couple properties - either rentals or flips, not to be mixed. This is be more of a real estate holding company. 2) A separate LLC to perform property management duties for the rentals, as well as manage deal [flip] sourcing and construction/project management. This would be the entity that has all staff on payroll The question is whether entity #1 or entity #2 should be paying for the rehab construction. My inclination would be to say that #2 should be writing the checks to the contractors and invoicing entity #1 for the work performed, however, I don't want to make things too complicated. Any thoughts on this?