Would love to get any thoughts on what people think of number of properties you should hold in a LLC. Thanks.
In “normal” states (i.e., not CA), I’d say in $125k to $250k in EQUITY per LLC. That’s just a gut feel, based on the amount of “protection” provided, as compared to the cost of properly runing another entity, especially the time required.
What do you mean bu not CA?
CA is a very expensive place to have an entity - minimum $800/year. That changes the economics of having entities!
My attorney wants to put all property in one LLC and do equity stripping. I always thought there should be a dollar amount as suggested for each LLC. I’m paying this attorney for advice and he works with alot of investors. So do I listen to him? hum.
Why couldn’t you just put in several properties in one llc and put a few more in another llc you can still acomplish the same. Without having all your eggs in one basket.
The idea is I would not have all my eggs in one basket because there would be no money (equity) to get. The LLC would be in debt to me first for the equity.
My atorney did not feel there was a need for more than one LLC. Believe me I asked the same question. Also asked if I needed to set up a separate entity to manage the property and was told the same LLC that holds the property can manage the property.
We are setting up a RLT. The RLT will own the LLC that holds our property.
Maybe someone else will chime in either way keep us posted on how it works out.
Explain “equity stripping”
Ask your attorney what would happen if you had $1,000,000 worth of property in a LLC (even w/ no equity) and someone wins a judgement against you for 600,000.
Then ask him if you had a seperate LLC for each property.
If the property values are only 60-200K each I guess I would group a couple in together but beyond that I would want each one protected individually. Lawyers that come after you will look at the LLC and see what assets are in it not how much equity you have.