Acquiring LLCs For My Properties And Rental Income

[Daley Gunter]

Hello bigger pockets family!

How many LLC's should I have to ensure I am protected and correctly set up to do proper investing?

I've heard that you need at least 1 LLC but I've also read where you could do 3 LLC's.

[Megan Templeton]

Hi there!

We recommend a dual LLC set up. I would recommend one operations LLC to manage your properties/business activities with. This LLC will be a shell LLC that holds not assets but is your public facing entity. The point of this is so that if you are sued, you will be sued with your LLC that contracts with third parties but it doesn't hold an assets so there is nothing for a litigant to recover. In addition to the operations LLC, you will need an asset holding LLC - I recommend the series LLC (or DST if in CA). The series LLC will allow you to place one property per child series so your assets will be separated and liability minimized. The asset holding LLC will then contract with your operations LLC for property management. This set up would provide you with a scalable structure as your business grows, liability minimization by the separation of assets, and anonymity can be put in place as well.

Thanks,

-Megan