Proper LLC Structure

[Da Shiek Woodard]

I've seen some posts on the LLC topic (especially the Wyoming LLC trend) and of course ended up on the fence. My scenario is I have 800+ credit, great job history, and a rental with $300K in equity and cashflow of $900 after expenses. I am interested in the potential of LLCs because of the business credit I can build which could potentially accelerate my purchasing potential. The way I see it, I have the following choices:

Option 1 - Get a Wyoming LLC for anonymity, which holds the LLC the owns my rental

Option 2 - Get an LLC in my home state that owns the LLC in whatever state I buy a rental in

Option 3 - Get an LLC only in the state that I buy a rental

Option 4 - Don't get any LLCs because I don't have enough property to need it and get an umbrella policy

I am officially stuck in the mud trying to figure this out.

[Richard Bechtol]

Hi,

There is actually another option for setting up your business to avoid the need for having many LLCs and instead you would have 2 one for operating and one for holding assets. It is slightly more sophisticated than what was described above, but you would use a Land Trust to own each property and the Land Trust would in turn be owned by an individual Series of your a Series LLC. The individual Series LLC's ownership is limited to a beneficial interest in a Land Trust, and, as such, it avoids the need to register to do business in the other State as it would if the individual Series LLC was a title holder. The Land Trust additionally offers the benefit of another level of anonymity through a nominee Trustee, while maintaining the asset protection and compartmentalization of the Series LLC. This strategy has worked for many clients that I have worked with who would like to have the liability protection of a LLC, the ability to scale without creating a new LLC each time they acquired a property while still compartmentalizing each asset. Additionally, it provides layers of anonymity.