All Forum Posts by: Joshua Branovsky

@David Shuman

My opinion after years of research and many many conversations with professionals.

Your first 4 doors, I wouldn’t worry about putting into LLCs. Your head will already be spinning with the deal details.

Have a $500k-$2m liability insurance policy on each property and if really worried, also put them in umbrella policy as well (I did this, I was worried)

Liability is lower for “mom and pop” landlord so under 4 doors, statistically lower risk.

After 4+ doors, do LLC.

At 4+ doors would be hard to argue you aren’t running rental businesses and should have accounting structured as a business as well as gear up liability protection.

NEXT QUESTION

"Should I put every property in an LLC?"

If you’re going to have less than 10 properties total, and you are worried about risk, then maybe throw every single property in an Llc. Which, then you will have 10 separate businesses and need 10 separate credit cards and books etc. Big pain to do correctly.

Slightly more sustainable and less of a headache;

Put a certain qty into one Llc and then have a holding company.

Example: 5-10 properties under 1 LLC then that LLC will be held in "holding company LLC"

So If you have 40 properties. 10 properties per LLC. 4 LLCs. All 4 LLCs are held under 1 holding company.

There’s a few more nuances you could choose to explore with this, but this will get you started.

Additionally:

1. Don’t be a slumlord

2. Maintain safety aspects of properties

3. Follow city/rental certs, zoning, inspections

4. Do what your lease says you will do

5. Don’t discriminate and offer equal housing, etc

This was after a lot of reading, research and conversations with CPAs & Attorneys to put this simple, decisive, personal opinion together.

*Quick tip*

Prime corporate services does LLC creation with articles of organization, op agreement, and EIN for really cheap if you say you were referred by someone who uses them.