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Updated about 2 months ago, 11/05/2024

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14
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1
Votes
George Bell
1
Votes |
14
Posts

How to structure LLCs for rental portfolio

George Bell
Posted

Hello, 

I’m curious to hear from experience investors about how they structure/ organize there LLCs. From local real estate meetings , real estate attorneys, and other local investors I’ve heard different ideas and I’m not sure which direction I would like to go. 

1. Have your portfolio in one LLC . Get a large insurance umbrella policy for that LLC for protection. So in the event of legal troubles the umbrella policy should cover the potential damage before they can come after your properties. Umbrella policies are only good per LLC so it wouldn't make sense to spend the money on multiple umbrella policies for multiple LLCs imo.

2. Have your properties in multiple LLCs . Therefore they can only go after what is in each individual LLC.

3. From a local RE attorney. Set up partnership ship LLC - have the deed of each house in the partnership LLC. Set up another LLC to have a 1% stake in the partner LLC. The LLC with the 1% stake is responsible for contracting work and property management. Therefore if you come upon legal trouble they can only go after the LLC with a 1% stake , therefore the most they can get is 1% of the value of the property .

I could see some pros and cons of each. I’m curious to hear from others with larger portfolios and how they are structured.  Thanks 

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