asset protection for Rental Properties 1 LLC? or Many individuals

[Justin Summers]

I'm looking at buying several properties (8-10) in a lower income area of Baltimore Maryland for cash as a retirement income plan. The area cash flows very well.  My concern is with litigation mainly from tenants.  

I was thinking about this senerio. I would create a single member llc for each property that I purchased for example 123 main st , llc then each LLC would be owned by another single member LLC let's call it MyMain, LLC.

I was also thinking about recording a large lein/mortgage/judgement against the mymain LLC to further judgement proof the rentals and myself

My thinking would be that if some sued 123 Main St , LLC worst case is they would get a judgement only against that LLC which only owns 1 house.. The prior recorded mortgage/lein against Mymain , llc would have priority since it was recorded at the purchase of the propery. So Mymain, llc would get paid on the sale of the property owned by 123 main LLC before any judgment would be paid.

My questions:

1. Does this seem like it would work for asset protection? 

2. Would I be okay recording a lien against the Main LLC (MyMain, LLC) or should I record a lein/mortgage against each property individually?

3. Since I would own My Main LLC as a single member and each of the 8-10 property's llcs would be single member llcs owned by MyMain, LLC would everything be considered disregarded entities in the eyes of the IRS for easier taxation and filling?

4. What ways would a plaintiffs attorney try to get at my other assets?  Basically what argument could they make?

I know this sounds like I'm going a bit overboard but I'm looking at investing the only $500,000 I have saved for retirement into these rentals and will be renting to section 8 tenants that like to "work" the system anyway.  That the all the houses were built in the 1920s and there have been quit a few huge lead paint lawsuits won by poor section 8 tenants against landlords in the area. 

Thanks for any input

Justin

[Justin Summers]

@Gabriel G. Thanks for the reply Gabriel and also the concern, I do have other rentals and other investments I had just marked that $500k for retirement. I have been in real estate for 30 years investments and brokering. I am aware of the section 8 challenges and 2 section 8 properties in baltimore already. As far as paperwork as long as each of the LLC being owned by the 1 single main LLC are all considered disregarded entities by the IRS the paperwork /filling for taxes is really the same since it's all under the same EIN.

I have about 2 millions in other assets (Other than the $500k in Cash)   which is what I'm trying to insulate from any judgment.   

For those that don't know about the lead issue in Maryland the courts have really gotten out of hand with it.   Terrance Smith claimed he got lead paint from a row house he lived in 20 years ago and never completed high school and can't get a job now at 22 y/o.  He had higher than normal lead tests when he was a child ...  They never tested the house for lead and never proved that that lead poisoning came from that house but the jury still awarded him a 9.3 million judgment against the property owner.   Even though they never introduced anything showing that the lead poisoning came from the house or that the house even had lead based paint.. Only because it was built prior to 1978.   That and the Maryland Courts recently eliminated a cap to landlord liability in lead based paint cases.