Property management/LLC formation/Collecting rent

[Alvaro Tuchan Jr]

Hello, my father recently made his single family home and is creating a 4plex in Los Angeles, CA which will be done in approximately 1 month. I have offered manage the property, since I want to begin real estate investing/STR in the near future. I am looking for advice regarding if we should create a LLC/corp? Depending on the answer to the question before a business account vs separate personal account? Efficient ways to collect rent? And other pieces of advice or book recommendations would be greatly appreciated.

[Megan Templeton]

Hi there! I would recommend using an LLC for your propery to add an additional layer of liability protection. It can be useful if the LLC is also an anonymous LLC to add another layer of insulation for you. The LLC can also provide some tax benefits. You will then set up a biz account for the LLC and collect rents through such. A stronger alternative (although a slightly more complex set up) is to have one LLC that owns the property (a holding LLC) and one LLC to manage the property (the would be a shell LLC that never holds assets and is only used for public facing activities like interacting with tenants. The dual LLC set up is useful because if a tenant or third party were to sue, they would sue the operations LLC that doesn't own anything so there would be nothing to recover. I would look into softwares like Stessa as well which can be useful for accounting when managing. For resources to review, Royal Legal Solutions has a ton of videos/articles/books geared towards new investors and best practices for entity structuring and operations.