All Forum Posts by: Amby Bhagtani

@Amby Bhagtani

Well... that's kinda the point... As its been discussed nearly daily on bp, the "right" legal structure to invest in residential housing could be anywhere from sole proprietorship to a really fancy, i.e. expensive, LLC and trust structure that many lawyers will happily charge to setup for you (and some CPA will love to charge you to do all the tax filings and maybe even your accounting/bookkeeping). Meanwhile, if you don't operate that fancy structure correctly, you'll pierce your corporate veil and lose that limited liability. You may also lose the anonymity of the Trust.

So, investors have posted investing with their own names in the 10s, 20s, 30s, even over 50 units.  Generally, keep your properties in good repair and have your insurance correctly.

Its whatever you feel comfortable doing.

The umbrella policy goes over existing policies under the same name/insured. So, if you invest under your name, you just need the one policy. Granted, if you use just one LLC, you still would only need one umbrella policy...

The usual needs for the LLC come up when investing with non-spousal partners and commercial property (non-residential or more than 4 units).

@Amby Bhagtani

I didn't realize that OH and/or CA even recognized series LLC. If they did recently, that just adds more to the thought of not using a series LLC since they are so new. There is now legal precedence on how they are handled. Consult a qualified professional.

1st, you don't always need a LLC and Trust... Its posted nearly daily on the boards, and it wasn't your question...

Its really up to you and what are you trying to achieve / are comfortable with doing. Whether you have 1 property to a LLC or 50 to a LLC is up to you. How much administrative headache do you want? Do you want umbrella insurance policies (while you may not need an umbrella policy you still need insurance) do you want or want one to handle multiple properties (would all need ot be Title in the same LLC). Are you looking to setup a 'mgt LLC' to run your operations?

Do you want / willing to pay that $800 annual fee per LLC in CA?

Of course, your financing should/will move to commercial loans, no more conforming loans (if you have any).

Good luck.

@Amby Bhagtani what’s your goal / intent?

@Amby Bhagtani

Are you a CA resident? That may change the analysis. CA charges a minimum of $800 for any LLC that is "doing business" in CA, which is more likely to be reached if you live in CA. CA does not recognize series LLCs. Also, probate laws will vary from state-to-state, so whether you hold title in a trust may differ as well depending on your residency. In CA, you often will see your living trust be the member in the LLC(s).

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.

If the house isn't clean, then charge them for it.  Hire a professional to come in clean it.