Need Advice On Forming LLC's For 4 Rental Properties.
I'm 32 years old and own 4 rental properties. I have no idea where to start as far as forming LLC's. Some of my ideas are:
1. WA LLC's for each house and a WA corp to own the LLC's
2. Out of state (Nevada?) LLC's for each house and an out of state corp to own
the LLCs'
3. WA LLc's for each house and an out of state corp to own the LLC's
4. One LLC to own all houses
5. One corp to own all houses
6. One LLC to own all houses and a corp to own the LLC
I live in Wa state, my properties are in Wa state. Any suggestions?
I'm also interested in coming up with some creative ownership structures and so, I thought I'd throw another idea into the fray.
Here's the idea:
Put each prop into its own trust. The beneficiary of the trusts will be LLCs. Each LLC would be the beneficiary of 3-5 trusts/properties.
But how about the management of those properties. Well, since managing the properties does entail its own range of risks and it would be nice to keep that separate from the property specific risks, I'm thinking about having a completely separate LLC be the property management company. Each of the trusts would hire this one LLC to manage the properties.
A question to the original poster....had you considered the property management aspect?
Does anyone else try anything like this? Is it logical?
Hmmmm...interesting. Another write-off. (the property management aspect).
Another problem I've run into is getting enough liability coverage. My insurance company says that their commercial umbrella coverage requires that all assets be at the same location so since the rentals are all at one address, what dod I do. Is this just my insurance company or has this posed a problem for anyone else. Any suggestions on liability coverage?
Thank you thank you, the legal profession thanks you.
My god are you expecting a wave of legal actions against just four properties. What are you doing, running funny little laboratories in each property? Have you turned on Red lights that revolve and neon signs on the roofs with on and off signs pointing to the properties.
The costs of all this legal stuff would be very expensive. Just corporate stamps alone would require overload springs on your car. Sounds like overkill.
He knows that I know that he knows that I know etc. etc. Back to the Court of Assizes er something 800AD.
Just do the one LLC. Have an attorney or an honest man, now thats a switch. Be the Trustor. All attacks will come to him and he will lie alot and keep you pure and unattached.
The above is great for all future actions except one. Divorce. and that attack is so conclusive, loaded with full knowledge of all your plans. I mean who does not on occasion talk in your www.sleep.l
Good luck, the fees do add up and you must in all sincerity balance out the costs versus the walls you raise to isolate your transactions.
Probitity, Lucius
My question for you is how much is one of your investment property worth? For me, I would not open 1 LLC per unit unless the unit is worth more then a million+. Otherwise, I would have all 4 properties in one LLC in WA. I would open another LLC in Nevada for their great benefits. Good Luck!
There is no set answer to your question without looking at the tax and asset protection aspects of any structure. In your case 4 llcs may be a bit much unless you have sufficient equity. Possibly two.. The land trust is an option if you are concerned about the due on sale clause. I would definately structure you with a management corporation to control everything. I have structured many of my Washington clients with a Corporation managing their llcs with a possible holding llc to minimize the annual tax returns.
Sincerely,
Clint Coons
Quote:
On 2003-11-12 21:36, Lufos wrote:
Thank you thank you, the legal profession thanks you.
My god are you expecting a wave of legal actions against just four properties. What are you doing, running funny little laboratories in each property? Have you turned on Red lights that revolve and neon signs on the roofs with on and off signs pointing to the properties.
The costs of all this legal stuff would be very expensive. Just corporate stamps alone would require overload springs on your car. Sounds like overkill.
He knows that I know that he knows that I know etc. etc. Back to the Court of Assizes er something 800AD.
Just do the one LLC. Have an attorney or an honest man, now thats a switch. Be the Trustor. All attacks will come to him and he will lie alot and keep you pure and unattached.
The above is great for all future actions except one. Divorce. and that attack is so conclusive, loaded with full knowledge of all your plans. I mean who does not on occasion talk in your****Must Reach Freshman Investor status before posting URL's***
Good luck, the fees do add up and you must in all sincerity balance out the costs versus the walls you raise to isolate your transactions.
Probitity, Lucius
You are saying if the IRS comes to the trusty he isn't going to tell them your name?