LLC as Rental Property Owner AND Manager

[Avery Goodman]

Hey all, currently own four Florida rental properties (one triplex and three SFHs). I created a sole-member LLC to own and manage the triplex, and then created a second LLC to own two of the SFHs. The last SFH deed remains in my name. First question, is making an LLC both owner AND manager of the triplex a solid strategy? Second, should the second LLC be both owner AND manager of the two SFHs, and for accounting and tax purposes, should the second LLC have its own bank account, credit card, etc.? Third, should I assign my LLCs a PO Box as primary address instead of using my home address as their primary address? Fourth, have I got it all wrong anyway?!

My goals are to limit liability and to minimize tax responsibility, although the latter I realize deserves its own thread.

Last, as it stands now, I'm very hands-on with property procurement, renovation, and management, which is to say, all my tenants know me.  I don't mind the occasional fix-it call, and it doesn't limit my ability to go out and find other deals.  I love what I do all the way around.

[Aaron K.]

You are probably overprotecting yourself unless these properties are paid off. I'm not sure about FL but a CA LLC costs $800 per year so you could be spending $1,600 per year to protect your equity. If you are self managing I don't know if you could add another LLC, and if you did it might just be cheaper to hire a PM. You might want to talk to an attorney who isn't trying to sell you something and pay them for their time. Most LLCs that I've seen don't split until about $2M in value