Asset Protection-Moving from an individual investor to Systematic Investor

[Kumar Paj]

After listening to Asset Protection podcast and having a sizable portfolio, I started believing that now it is the time to move on with systematic approach and long term strategy. As a part of long term strategy, I am considering to put all my rental properties under LLC. Here are my specific questions and I would appreciate any feedback and inputs from experienced investors, attorneys and RE Agents.

- It is generally believed (also recommended by Scott Smith on BP Podcast 109) that it is a good idea to set up 3 LLC's; One an asset holding company for flips, another for buy-and-holds, and the third one is the operating company. I get the reasoning behind this but the key question is at what stage of your business cycle. Obviously it doesn't make sense to set up 3 LLC's if I've 2-3 rental properties and I do only 1-2 flips per year. However, is there any rule of thumb in terms of number of properties or portfolio size in $$ when an investor should seriously consider this (3 LLC's) strategy???

- How difficult it and costly it is to operate/maintain LLCs?

- How about Series LLC? Can I have a Series LLC instead of 3 LLC's per my note above? Can someone share some more info about this?

- As of now, my rental properties are on my and my wife's name (3 with mortgage and 4 cash purchase). If I set up a new LLC (assuming that is the right strategy), How do I transfer these properties to LLCs? What about mortgages?

- What about insurance? What happens to my current insurance?

- What about future purchases? How easy or difficult it is to get a commercial loan for future purchase?

I think, I already asked too many questions….Would appreciate inputs from experienced investors, Attorneys, CPAs….