A New LLC With Every New Property?

Comments(5)

• 
  ray_higdon16th August, 2004

  I think it would be crazy to do this. Paperwork, taxes, annual needs to keep the LLC going.
  
  I believe most use a corporation for flips for tax reasons and if you were holding for cashflow, it would make more sense to have one LLC and each property in a land trust with the LLC as a beneficiary
  [addsig]

• 
  InActive_Account16th August, 2004

  For flipping and renovating properties I use a corporation. For each rental property I use an LLC for each one (Ex:123 ABC ST.).

• 
  myfrogger16th August, 2004

  I use a separate corporation and separate LLC's for each property I own.
  
  The cost is minimal and the benefits are extensive.
  
  Property is unique. I have yet to have a transaction go extremely smoothly. There is always something that happens that makes me glad I paid less than $300 for asset protection.
  
  The main answer to your question of why do it is simply the asset protection.
  
  It also makes accounting much easier and I don't really see a downside at all other than having to call my attorney for a new entity each time I want to buy a property (and having to pay him $300).

• 
  ew8616th August, 2004

  Depends on how much risk you are willing to take vs. the effort you want put to create an LLC. I personally do not create one LLC for each property. I set the limit that each LLC max asset is $x. Each LLC can have multiple properties. I feel that LLC is the second tier protection. If anything happen first, the lawyer has to find out who is the beneficiary of my Land Trust. I use Trustee who live in another country. That way it discourages the lawyer even to start the case.

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  ray_higdon17th August, 2004

  The thing that scares me about an LLC for each property is I heard some states dramatically increased the annual fee to keep an LLC going and investors got hit hard that used an LLC for each property. I think it was Maine and California. I don't think lawyers like land trusts as there is no annual fee and they make little off of them.
  [addsig]