Is it worth creating an LLC for each (SFR fix n Flip) property ?

[Al Salous]

Trying to balance cost and risk protection. I have seen many suggest limiting to below a dollar value for for multiple SFR fix and flip properties.

[David M.]

@Al Salous

Its common to may a LLC for each flip. Write your contract with buyer as "Al Salous or an entity to be formed." So, when you are ready, form the LLC using the street address as the name. Of course, it depends on your State's process for forming LLC's. In NJ, I can apply online and in say 5-10min have my LLC formed and go to the bank to open the bank account.

I've never heard of a "below a dollar value" for flips. Usually, thats for long term holds. Most do $1mil in value (not necessarily equity) per LLC as a rule of thumb.

Whether to do 1-to-1 will depend on how much flipping you do and your personal preference. its just that much more paperwork and legwork to open and close accounts per project. with that, I could argue either way. For example, if you only do a few a year, one LLC is fine since you limited exposure. Or, do 1-to-1 since you have little work to open and close LLC (and associated accounts) as opposed to if you do 20 a year.

Another approach is to change LLC's after a certain time or number of deals. So, you'd have LLC xyz1, then LLC xyz2, etc. Literally just advance the number. This is a nice balance to work with just one LLC/account but be able to "sluff it off" to effectively eliminate/mitigate your risk since the entity will/could be dissolved by the time somebody wanted to file suit or something. I assume this is perhaps what you are looking for...

Good luck.