All Forum Posts by: Pedro Morais

BP Team, 

Seems like there is a lot of interest in other posts regarding whether it is necessary/wise to have an holding LLC in addition to individual LLCs that own property. I found a lot of mixed opinions and felt best to start a new post to consolidate strong perspective from people that have actually have researched this topic.

Scenario: let's say someone owns 5 multifamily properties, each one under an individual LLC. Would it be advantageous to bring these 5 LLCs under a holding LLC? Some say that the benefits of this is that it gives you an extra layer of protection, anonymity (if you have the holding LLC in a state like Delaware) and additional ease in transferring money between the LLCs. Others say that by having the holding company you can actually put your individual properties at risk as someone can now find a way to sue the holding LLC and, because it owns the assets in each individual LLC, then all the equity you have built in each property is now at risk. In addition the holding company also represents extra costs (annual filling fees and additional insurance).

Would love to hear people's opinion on the pros and cons of the holding LLC. If you believe a holding company is a wise to do, could you clarify on whether this could be done separately from creating an "operations LLC" (or do you always need both?)

Thank you!!

Hi BP,

Can you make distributions from one LLC bank account to another LLC? In other words, if I have a surplus of money in one LLC account and the other LLC has need of capital for construction, can I transfer from one LLC to the other directly or does it have to be distributed to me personally first?

Thanks,

Pedro

@John Warren and @Ashish Acharya thank you very much! This is great to know! In this case it is a SMLLC. Another question that arises is how to do this without piercing the corporate veil? Can I just pay the HELOC payments with my personal money and then make contributions to my personal account from the LLC?

Hi BP, 

I have several LLCs where each one holds one individual property. All of the LLCs have their own EIN and separate bank account. In order to pay for certain expenses by credit card, can I use one LLC's credit card to pay for expenses related to the other LLC's and then simply pay it back via a distribution?

Thanks,

Pedro

Hi BP,

I have recently bought a 6-unit residential investment property with a personal HELOC. This property is under an LLC. Is there a way of getting a tax deduction on the interest I am paying on the HELOC?

Thanks,

Pedro