All Forum Posts by: Dani Zee

@Lawrence Potts thank you; this is good stuff to think about. I'm leaning towards creating a separate LLC for each of the properties and another LLC for operations (for all properties). These would be pass-through entities so still all one one tax return with Schedule E's (for real estate holdings) and a Schedule C (for management/operations), as far as I understand.

Annual LLC filing in Oregon is $100 so that would add an extra $300, plus another $300 if I hire a registered agent, per year. So an extra $600/year total, which isn't insignificant, but may still be worth it for liability protection. The tenants already know who I am so anonymity is not possible anymore, which is OK.

Thanks @Rachel Mazzanti! :)

Thanks @Rachel Mazzanti. I've read that if a company shows net losses for more than 2 years in a row, that's an IRS audit red flag. If the PM LLC only has expenses and not profits, I'd be concerned about that. I'm also curious if I had a PM LLC, would I then have to issue 1099s to my holding LLCs for rent collected?

I'm in the process of switching everything up right now (transferring properties to LLCs, switching PM software and accounting software, etc.), but I do self-manage and do my own bookkeeping.  I have a CPA who I can also ask about this, but I'm not sure that RE investors are her specialty, and my biggest concern is liability more than bookkeeping. To answer your question, about 6 doors/3 properties (for now) and each property has at least 2 bank accounts each.  

Hi, I've searched everywhere for hours can can't seem to find a good answer to this question.  

If I have different rental properties, each owned by a different LLC, what's the best way to market and do business with my tenants under one single business name (while still protecting personal assets and the other properties own)? That is, I want to limit liability to the one holding LLC that the tenant lives in (if there's an inside claim) and to the management entity, period. I still want my personal assets and other rental properties to be protected.

I have a different bank account for each property (LLC), but I want one single website and email address for tenants and prospects to interface with. Ideally, I'd sign all my contracts/agreements as the [marketing] business. I also have certain software and overhead that is used for all LLCs, and I need to make sure expenses get tagged correctly to avoid commingling and piercing the LLCs' veils. I manage my own properties.



Considerations: I don't want to simply do the operations side of the business (i.e. management) under my own name, because that would create liability and defeat the purpose of using LLCs to hold the rentals. 

One option is to sign all agreements as the member of the LLC that holds each property (so each property would get a different signer name, e.g. "Dani Z for 123 Main St LLC"), but that is confusing to tenants who think they're dealing with my marketing company (e.g. "Danismanagemententity.com"). And there are certain expenses (e.g. website, PM software) that are currently shared among the different LLCs.

How do other people handle this? I was thinking I could have a separate LLC that only deals with operations/management, and that LLC could pay for website, software, and tenant screenings. But then that LLC would show a loss each tax year and probably be suspect by the IRS. I don't want to pay myself to manage because then I'd be paying schedule C taxes on that.

I was also thinking that maybe I could use an assumed business name/DBA for the marketing/operations, but how could I do that while still limiting my liability to that one property and not my personal assets or other properties? If I made a DBA beneath the property holding company's LLC (owned by that LLC), then that DBA would only serve that one property, right? I can't have a DBA for "123 Main Street LLC" that is the same DBA as "456 Main Street LLC".

My biggest consideration is limiting liability, and my second consideration is keeping my bookkeeping and taxes no more complicated than they need to be.  (FWIW I already have a good umbrella policy and am not interested in keeping the properties titled in my name.)

Any insight you smart folks can provide would be amazing.  Thank you.