Should RE Investors Break Portfolios Into Multiple LLCs?

[Nick Gray]

I understand the reasoning behind placing real estate in an LLC: for the owner to shield himself/herself from personal liability in the event of legal action. However, is one LLC enough? Say an investor owns 10 properties in a single LLC and those properties' equity represents most of the investor's net worth. He/she has no personal liability if a tenant takes legal action, but the equity of all 10 properties is at risk. Since that's most of his/her wealth, the LLC doesn't appear to be that useful. Given the above example, should investors break their portfolios into multiple LLCs? If so, how many properties should go into each LLC? There's a balance between legal protection and tax + LLC filing that needs to be struck. Would you name one LLC the holding company of the other smaller LLCs?