Asset Protection: Setting up a property management company as LLC

[Jacob A.]

I think I came across this idea on BP but cannot find that post. Basically to protect from lawsuits one creates a property management company as an LLC. You rent the property to the LLC and the LLC sublets it to the tenant. The advantages are:

1. Property remains in your name. Helps in getting financing and insurance.

2. If sued, the LLC does not have any assets. Setting the property as an LLC puts at least one property at risk.

3. Avoid having to set up multiple LLC for each property.

4. Avoid having to do any title transfers.

Any disadvantages?

[Michael Plaks]

Originally posted by @Scott Smith:

@Jacob A. You're on the right track 

Is he?

Would not anybody who initiates a lawsuit name both the management company AND the owner as defendants?

Jacob thinks that just having a management LLC serves as the shield for himself owning the properties. I'm not an attorney, but my layman's understanding is that this will not work.

Now, Scott's suggestion to combine a management LLC with a holding Series LLC makes total sense. But this is NOT what Jacob had in mind. Jacob wanted to keep properties in his own name for financing/insurance reasons. Which is understandable, but it would defeat the asset protection goal, would not it, Scott?