Multiple LLC under Corporation

[Daren Wang]

Hi, BPers. Wish all of you are gonna have a great weekend. I have been listening to the podcast for a quite some time.

Here is my Situation, I incorporated a holding corporation in the Great state of New Jersey, and will purchase properties which need rehab work, and LLC them (so the corporation would be the sole member, correct me if I am wrong).

Questions:

1Does the structure said above provide legal protection as usual (a real person with many LLCs)?

2 For rehab work contracts, would be appropriate to contract under the holding corporation or it has to be under the specific LLC?

3 If we hold the after-rehab properties for renting out, does the rent has to be rendered by renters to LLC bank account? or directly to corporation account (afraid that in the event of legal dispute, court would rule commingle with funds between the parent corporation and LLCs, and losing protection as piercing the veil kick in)

4 If we do flip few properties, does it justify to LLC the properties right after we purchase them, or we can wait and see (if we could not sell the house, and then LLC it as rental property)

5 lots of LLCs are named as their address, just wonder which happens first, setup LLC or purchase the house?

i if setup LLC first, does it contain risk that the deal might not go thru and

you end up with an address name LLC wouldn't not be used elsewhere?

ii if purchase the house using corporation account, then have to transfer

the title to the LLC with another attorney fee and excise tax, and title

insurance...you name it... Am I missing anything?

Is there any method/process that could save some bucks and being a lot smooth transition than the two situations I could imagine.

Many thanks to anyone stop by and give their 2cents!!!

[Gary Bailey]

I'm not an attorney or a CPA, however, I am someone who at one point set up a ton of LLC's and ended up with 24 (no exaggeration!) bank accounts for my little "real estate empire". Guess what? I got sued when a buyer didn't close and I kept his down payment (I was completely in the right and the lawsuit was dropped)..but guess who he sued? Every singe one of my LLCs and me personally!!

I have learned that LLC's don't protect you from someone who wants to bring a lawsuit against you - even if you didn't do anything wrong.

Consider consulting a cpa and an attorney. However, remember the KISS method: KEEP IT SIMPLE.

Gary