Legal Structure Questions

[Jennifer Taylor]

Hi everyone, 

I'm looking for any legal references that can help me answer the following questions and provide guidance as to whether this approach is sound or needs adjustments: 

-What is the entity structure for managing assets and activities of a short/mid-term rental business? We currently have a LLC that owns our existing rental property and we run the short term rental activities through this LLC with its own separate bank account.

-We are closing on a primary residence in a couple of weeks that has a cottage on it that we will begin short/mid term renting upon close. My thought is that we open a new LLC to run all property management activities (for existing rental property and cottage) along with new bank account, etc. for all activities. The existing rental property will continue to be owned by the existing LLC. The cottage property will be held by us personally as it will be located on our primary residence property.

-I will then put in place a lease agreement between ourselves personally to the new property management LLC to lease the cottage and between the ownership entity of the other rental property to the prop management company. We will also have a short/mid term lease agreement put together for renting out these rental properties with an intention to further limit liability.

My overall question is whether this structure is sound or if we should take a different approach to limit liability. Additionally, if we open a LLC to manage our own properties, do I need to hold a broker's license in KY to do this legally? I am a licensed agent in State of CA but have not taken steps to also get it here.

If anyone has experience in this or has a referral to a legal firm who can help with this I'd appreciate it.

Thanks y'all!

Jenny