best way to isolate risk of each rental property

[Lynn Y.]

My question is about how to best organize many rental properties to provide best shield towards potential law suite.

From this forum, I read about multiple properties (mortgage free) under one LLC; or one LLC for each properties, which leads to multiple banking accounts/contracts/filing to manage.

Another thought from this forum is having a separate entity to "hold note" of the properties under 1st LLC, so that the 1st LLC only appear to have very little equity when a law suite arise.

Does this separate entity have to be a trust? Can I form a LLC (me as single member) to hold notes of property of another LLC (me as single member). Does that better protect me from potential law suite.

Is it a valid scenario that I have one master LLC holding notes again all other llcs (each has one or two rentals), but I make the management a little easier by using one master LLC bank account to do the common expense. If I lost in court and exceeded insurance coverage, does this scenario better protect me that I only lose maximum (say 5% of the property value) of the 1st LLC (as rest are holding by a master LLC?)

I hope I asked my question clearly.  All rentals except two are in connecticut.  I guess state can be different.

Thank you for any comments you can share.

[Marcia Maynard]

Property Insurance and an Umbrella Insurance Policy will protect you more than an LLC, if it is the liability piece you are concerned about. Establishing and maintaining good policies and procedures to keep yourself out of trouble in the first place will protect you even more than insurance. Do the right thing, maintain adequate insurance, and sleep well at night.

If you have a need to establish an LLC for other reasons, then do so. Don't expect it to shield you, especially if you are acting solo. You can establish a good business plan and run a rental property business without an LLC and it will be less complicated for you to do so. LLC costs and reporting requirements also vary from state to state and might not provide a good return on investment.