The downside of investors not appreciating how much sponsor selection matters when investing in a syndication.Now bundle all of the above into one package and what you have is the allegations wrapped up in that complaint, investors who are wiped out, a syndication sponsor and its “capital raisers” wrapped up in litigation and the leaders of this group who will likely face personal liability and bankruptcy.  

By creating separate entities for the investments, you are looking to shield each investment from liability from the other investments.

Stock up on liability coverage you are in a trial attorneys paradise.    

The goal here is to reduce liability.Consult an Attorney for Liability Options: An attorney could advise on setting up an umbrella insurance policy to add an extra layer of liability protection.

What I will do is attempt to find a QUALIFIED substitute tenant, credit the original tenant with the rent paid by the new tenant LESS one or two months fee for the extra work and effort, but I will NOT release the original tenant from liability should the substitute tenant default.Look, the bottom line is that renting to tenants is a business, just like any other business.  

We generally advise our clients to go ahead and pay the recapture rates if death is the alternative.The good news about recapture - the deductions are a deferred tax liability to you, and an interest free loan from the government.

Before making your final decision, I'd suggest running the numbers both ways - calculate your tax liability versus the potential long-term impact of accepting those unfavorable terms you mentioned.

But for straightforward setups, you can actually form an LLC directly on the PA Department of State website yourself, and it’s very cost-effective.For larger portfolios or more complex structures, some investors prefer going through a real estate attorney to ensure their LLC is set up to maximize tax benefits and liability protection.

If your concern is liability, what I did was get an umbrella insurance policy on the properties I house hacked under my name.

You’re on the right track—setting up separate LLCs for wholesaling and building can simplify things and offer liability protection, plus putting properties in their own LLCs keeps assets safer as you grow.