Multiple LLC's vs. Land Trusts and 1 LLC - Posted by MFork

Real Estate Investing Real Estate Law
1

Posted by JHyre in Ohio on April 06, 2002 at 16:23:03:

You break up properties into separate entities once the initial one has enough value in it…$100k to @$250k in equity. Too little equity per LLC invites a judge to ignore the LLC and “pierce the veil” based on inadequate capitalization.

John Hyre

2

Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by MFork

Posted by MFork on April 02, 2002 at 20:59:46:

Does placing a property in a land trust and assigning the beneficiary to an LLC (one LLC for all properties) provide the same protection as land trusts and a different LLC for each property? If not, where do the differences lie? I live in Ohio.

Thanks

Michael

3

Re: Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by JHyre in Ohio

Posted by JHyre in Ohio on April 03, 2002 at 05:35:38:

One LLC per property is too many, and provides inferior protection. As a rule of thumb, $250k in equity per LLC (e.g.- 5 houses in land trusts with $50k in equity) should drive how many LLC’s you create.

John Hyre

4

Re: Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by MFork (Ohio)

Posted by MFork (Ohio) on April 03, 2002 at 08:36:35:

Can you elaborate as to why one LLC per property is too many and provides inferior protection?

5

Re: Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by JabberThom

Posted by JabberThom on April 03, 2002 at 16:59:13:

Not sure but I think JHyre meant to say “having more than one property in an LLC is too many” ie: have one LLC per property.

6

Re: Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by JHyre in Ohio

Posted by JHyre in Ohio on April 03, 2002 at 20:39:41:

Actually, I meant the opposite…one per LLC is expensive and provides LESS protection because a judge would disregard such a thinly capitalized entity…but thanks anyway, LOL.

John Hyre

7

Re: Multiple LLC’s vs. Land Trusts and 1 LLC - Posted by JabberThom

Posted by JabberThom on April 03, 2002 at 20:56:48:

Doh!! Guess I should remember to not put words in peoples mouths (or post) LOL; but seriously, I thought the point was to protect from potential judgement your other assets (properties)why would you bundle them up?