How To Structure Properties From A Tax & Legal Standpoint
I have more than 10 properties (both single and multi fam)
I need an opinion on if it is best to hold in an LLC or to hold as tenants in common from a tax and litigation stand point :-?
I won't give you any tax advice but I will speak to your litigation issue.
Each of these properties should be held by a separate corporation, LLC or land trust. It costs $500 to put such an entity together another $100 or so a year to maintain it.
Lets say a tenant trips on the sidewalk and falls in building number 4 and breaks his back. He sues. If you hold all the buildings in common then the liability can spread to all the buildings and you could loose them all. But if the building is owned by the Number 4 Building LLC then it is much more difficult for the liability to spread to other properties and about the worst that can happen is that you loose building number 4.
Of course its more complicated than that and if you do something really eggregious that causes the tenant damage then the liability might still spread but it is much more difficult.
Putting every property you own in a separate business entity may be a good option to combat litigation, but it is not practical, not cost effective, and a nightmare both in management and tax wise.
This is a good question to ask, but no offense meant, you're asking the wrong people. Here, all you are going to get is just opinions from strangers whom you don't know if they know what they are talking about or not. My suggestion is for you to contact your tax advisor and legal advisor and have them guide you as what will be most benefical to you for your particular situation.
Roger