Simple Property Management Structure in CA

[Max Chernets]

Hi,
I'm trying to help out my family by taking over property management duties on 1-3 residential properties in Bay Area/ SJ. I was hoping to get some idea on the easiest way to structure this with the following goals. I understand that I need to get a lawyer but I'd like to get a forum response so that I have an idea of what to ask the lawyers when I interview them.

Goals:
- I want to perform tenant screening, rent collection, maintenance work, paying contractors and doing minor work myself
- I will not be buying/selling properties. Only managing
- Min 1 property this year. Max 4 properties next year
- Property owners want to protect their assets from lawsuits
- I would like to create personal tax efficiency from my services. I will have other sources of income. This is only part time for me.

Thanks!
Max

[Steve L.]

The owner of the properties should have an LLC or a land trust with the LLC as the beneficiary and hold title that way. If they are getting a loan, it will probably to be in their personal name, unless a lender will loan them money in an LLC (not too many will).

You can either use a DBA (with the volume you're doing it may not be worth the $800/year for an entity). If you really want an entity, I'd probably suggest an S-Corp, that way if your rental income ever exceeds $250k you won't owe extra taxes.

You will want to join the Apartment Owners Association (AOA) or CAR so you can access their forms. The AOA allows you to do screening through them, I think.

I am pretty sure you need to be a licensed agent to manage property for other people, but not 100% sure.

Good luck.