Recommended resources for deciding on legal structure

[Brent Christensen]

My elderly mother just turned over management of a 1 bd rental unit to my brother and I for day-to-day management.  In the past the income has flowed directly to her (separate bank account) and she pays the income taxes on the rental income (and will likely continue to do so, as the money will still go to her and she has a low tax base). However, it is currently rented without any lease agreement or any formal paperwork, which horrifies me (and which I plan to rectify ASAP).  Luckily it has a very good long term tenant (who pays 25% below market rates, I might add!)

In addition to this, I will be renting out a personal home of my own and planning the purchase of an out of state multi-family unit (probably several).  In addition to all this, I may create a partnership with my brother (and possibly our mother) to invest in additional properties that would become part of the portfolio along with the current 1bd unit.   As you can tell, this all gets a little convoluted and I want to make sure I don't head off in a wrong direction..

What do folks recommend for resources to get myself educated, so that when I sit down with my lawyers/accountants I can make those conversations as productive as possible?

I currently operate an S-Corp (single employee), but I'm not familiar with the details of an LLC. I've read about creating separate LLCs for each rental property for liability protection, but I'm unclear as to tax benefits.

Is there a consensus on this? Do people create individual LLC's with separate bank accounts for every property, and then some sort of "holding company" that manages shared services? I'm in CA and generally speaking, all this complexity comes at the cost ($1,200 to $1,600 per tax return for example).

Long winded question - thank you if you made it this far and have some advice to offer!

[Dmitriy Fomichenko]

@Brent Christensen

An umbrella policy should cover all of your assets, this may include rentals that you own 100% as well as those you own share. Talk to your insurance provider for details, each policy is different, ask them what is covered specifically.

I would advise you against partnerships, number of things can go wrong with them. Keep things simple, if you can. 

If you have resources to buy an investment property, be the sole owner of it. Your brother can do the same thing.