LLCs - Holding Companies - Scaling

[James Mays]

Hello BP!

I have a question here regarding wither or not I should open LLCs and or a holding company for my upcoming scaling of my rental property portfolio. 

I have done my reading on Out of State Investing and Section 8 rentals (talked to local HUD sites).

My question is really if I am going to scale as planned what have you all seen structure wise. I know LLCs are a protection tool with no tax incentives but with those come higher insurance/fees versus staying in your name. 

Do I go get an Umbrella Policy? 

I have an MBA, sales guy, no issue with grinding admin wise but I would love to get to place in the next 2-3 years to work FOR ME not another fortune 500 :).  

Would love examples of what the pros do, Thank you!

PS: dropped a few pics of structures I saw online

Situation: 

-I am looking to scale my portfolio by utilizing out of state small-multifamily and working with Section 8 tenets. 

-Current Assets: <$100k in cash, ~$300k in retirement accounts, Primary Residence (CA) ~$100k in equity, 1 LTR condo ~$200k in equity and a HELOC @ $80k to close this week hopefully :).

Task:

-Goal: Purchase 5 properties (~10 doors) by end of 2025

Action:

-My plan is to use traditional financing under my name to access the best rates then transition to using either HELOC/DSCR/Hard Money.

-Use this route then transition all the properties to LLCs?

[Chris K.]

I am not really sure what your precise question is. But I am curious who made those charts because it is frankly absurd. I am hoping it is not an attorney, CPA, or other licensed professionals. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.