Entity Structure for Rental Properties - Separate LLCs for Holding and Renting

[Tyler Rey]

Hi All,

I'm in the process of pivoting 3 units from a build to sell townhome project to rentals and looking for some entity structure advice.  These are going to be my first self managed units, but my intention is to continue adding units in parallel with development projects.  Entity structure wise, I'm getting conflicting opinions from lawyers/tax advisors on which scenario gives me the best separation between properties and asset protection from rental activities:

1. Each rental property is owned by a dedicated holding LLC and a separate LLC leases the properties from the holding companies and rents them to tenants. 1 rental company to many holding companies

2. Single holding LLC that owns multiple properties and separate LLCs that lease an individual property from the holding LLC and rent it to a tenant. 1 holding company to many rental companies

Tyler