Hi, Lee Phillips here. Welcome to my YouTube channel. I'm going to discuss a popular question that I often receive regarding putting real estate investment properties into separate LLCs. From an asset protection standpoint, it is advisable to have each property in a different LLC. This approach ensures that you have one egg in each basket, reducing the risk. However, managing the paperwork associated with multiple LLCs can be overwhelming. Lawyers may encourage this practice as they can charge you for each LLC. Additionally, there are various requirements and fees involved in establishing and maintaining LLCs in different states, such as obtaining tax ID numbers, filing tax returns, and complying with state regulations. To avoid drowning in paperwork and excessive fees, I suggest a logical division of your properties. Group similar properties under one LLC, for example, putting apartments in a separate LLC from single family homes. Similarly, if you have properties in different states, establish an LLC in each state where you have a presence. Make sure to review my YouTube videos on choosing the state for your LLC registration. It is crucial to have a legal presence in each state to exercise the rights and benefits provided by the LLC. Consider the risk factors and liability associated with each property. If you have a high-risk property, it may be wise to place it in its own LLC to protect the assets within that LLC from potential lawsuits. It's essential to strike a balance and not go overboard with the number of LLCs. Having too many LLCs for a limited number of properties or assets can become impractical and expensive. I want to share a cautionary tale about doctors from Long Beach who were persuaded by a lawyer to set up 53 limited partnerships at $5,000 each. This attorney also recommended registering...
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Video instructions and help with filling out and completing Form 8854 Properties
