Posted by Tony B Columbus ohio on October 23, 2003 at 12:14:43:
I agree with John Hyre’s opinion. Up to 250k in equity per llc. Consider, to keep the LLC legit, you need seperate banking accounts, credit accounts, books, insurance, operating agreements, tax prep, etc. All this duplication takes time and money. So think it through- if this is your first llc, set it up and learn before you launch another entity. Lastly, LLC is also NOT the right entity for FLIPs.
Tony
LLC: Debate - Posted by Kevin TEXAS
Posted by Kevin TEXAS on October 22, 2003 at 15:53:45:
My accountant and my realestate attorney have differing opinions about how many properties should be held in a single LLC. My attorney says 1 per LLC no matter how big or small. My accountant says do no let the value of combined properties in one LLC be greater than 1M. I buy and hold and I have been following my attorney’s advice and I have begun to accumulate a “herd” of LLCs. I would like to know what other folks are doing.
Re: LLC: Debate - Posted by Terry (Houston)
Posted by Terry (Houston) on October 22, 2003 at 19:21:38:
You also want to look at what level you hit the Franchise tax for a Texas LLC. You can lower that by having more LLC to spread your total income around in them. That is my understanding. Though I do not do 1 for each property.
Terry
Re: LLC: Debate - Posted by phil fernandez
Posted by phil fernandez on October 22, 2003 at 17:48:06:
One LLC for each property you own as a rental. And this will depend alot on how much equity each property has.
Lets assume you have two properties. One has maybe $5,000 equity and the other has $10,000 or so equity. In that case there is very little equity to lose so you could put both of the properties into the same LLC.
Now if the first property has $100,000 equity and the second also has $100,000 equity, I would seperate them putting each in it’s own LLC. That way if one property gets sued the other in a seperate LLC is protected.
You will also have to look at the cost of the LLC’s. I understand in CA it is expensive to form these. In VT it’s about $100 to establish an LLC and $15 per yr. after that.
Re: LLC: Debate - Posted by Dimpil
Posted by Dimpil on October 22, 2003 at 17:21:25:
Well the theory is if a tenant uses you then all they have is what is in that LLC. However, I think it’s an indivual as to how many and how much.
From what I’ve read (and my understanding could be wrong), it is better to have a land trust hold the property and the LLC as the beneficary of the land trust that way if they sue the LLC they get nothing, if the sue you, they get nothing and they can’t sue the land trust because it’s not owned by you. So that in itself will limit the # of LLC’s you need.
John Hyre has said… - Posted by David Krulac
Posted by David Krulac on October 22, 2003 at 17:18:44:
that he recommends 3 or 4 properties per LLC, maybe $250,000 worth. This seems to be a good middle ground between 1 property per LLC and all properties in 1 LLC.
David Krulac
Central Pennsylvania
Re: LLC: Debate - Posted by Tony B Columbus ohio
Posted by Tony B Columbus ohio on October 23, 2003 at 12:18:19:
i think anyone can initiate an action against an entity. LLC, C-corp, S-corp, or TRUST does not matter.
all you attorneys- am i right?
Tony B