All Forum Posts by: Jeremy K.

@Michael P.  yes i am under that impression. would love to learn more before i make another mistake about what you are saying

@Michael P.

Thanks this is helpful

@Steve Hall

I should have mentioned i have 20% down and financed these properties, which I think will make it harder to trade up at this point given I've only owned them for 2 years. 

Hi Bigger Pockets ,

This post is about a topic I've been struggling with for some time now. Here goes:

I began my real estate investing in 2017. I have a full time job, so i worked with some turnkey providers to purchase single family homes. Right now, my portfolio looks like:

Own primary residence

Own 7 single family homes in Memphis with 3 different management companies

Own 1 single family home in Birmingham with 1 management company (duh)

When I began this journey, I set up an LLC in Tennessee with a registered agent. As of now, I have transferred the first 4 properties I purchased into this LLC, but stopped from there. That means i have the remaining 3 Memphis properties and the Birmingham property in my own name.

Essentially, I am at a crossroads now. The dilemma I am facing is where I go from here with my entities. The scenarios I am envisioning are:

1) Transfer the first 4 properties back into my name, dissolve the LLC, and acquire a large umbrella policy to cover myself.

2) Create a second LLC in Tennessee for the remaining properties, an LLC in Alabama, and perhaps a parent LLC in Wyoming for asset protection.

For some context, I am planning to continue acquiring properties over the years, really with no limit in sight and will look to diversify to other geographic locations. Right now, the next property will be my 10th FHA loan, and I will need to secure financing elsewhere going forward, which is why i have paused at this stage to make sure I have my entities in order. But the 2 scenarios have me in analysis paralysis, and I simply don't know what to do.

Obviously, the 2nd scenario seems to make the most sense, but it's going to come with a steep cost, $1,000 per LLC, $300 annual registration fee per LLC in TN, not sure about Alabama or Wyoming but I'm sure there is a fee. On the other hand, ridding myself of the original LLC and getting the umbrella policy should be less expensive, but I'm nervous about the asset protection in this case. Am I leaving myself open to my personal assets being exposed? Is there a third option I'm not even considering?

Thanks!

@John Morgan

Yeah I agree it was a waste of money. I think I’m just going to eat the loss. It’s a sunk cost.

@John Morgan

Hi John

Thanks for the reply. I'm at a bit of a crossroads right now because I currently have 8 rental properties. 5 of those are in the LLC and 3 in my name. One in a different state. So in theory I would need to set up 2 more LLCs, have 3 total.

But this is going to be very burdensome, so I am considering QCD those original 5 from the LLC back to me, and just have all 8 in my name and getting an umbrella policy.

Have you ever dealt with this before?

Thanks

Hi Julie,

Just curious what you ended up doing here, i am in a similar position.

Thanks