Looking for some thoughts on how Investors are structuring their properties. I understand the different schools of thought regarding the liability exposure of LLCS. I'm looking to take two avenues; including good insurance and a LLC structure. I presently have one property in my personal name , another property owned by my IRA LLCs, and picking up another. I plan on putting the new property in a LLC that I will add to as I grow. My focus is structuring and growth presently without having to manage several bank accounts.

You are going to get as many answers as there are contributors on this one. I can only tell you what we're in the process of doing:

1) Put each property into a land trust. This is a DIY process, and the only cost is that of transferring the deed. Advantages: confers anonymity and simplifies estate planning. When you die, the successor beneficiary takes over control and the property doesn't have to go through probate.

2) Set up a management LLC to manage the properties. Advantages: If there's a problem, the properties are separate entities. And it shields you from personal liability. In addition, if you have a lot of properties, you can put up to $30K/yr in an IRA as your salary + company match.

Yes, you can add additional layers of protection, like having each land trust owned by an LLC which is managed by a management company which is owned by a parent corporation out of Nevada. Some law firms make big bucks setting up complicated legal structures like this. In my opinion, this is like the knights of old in plate armor: they were so heavily armored that they could barely move.

I have one LLC for all rental properties. It is a multi member add it is my spouse who is my business partner. My IRA property is not in an LLC ia is in a Trust account with a company that only handles IRA.

I have two banks accounts one is a standard business checking and the second is the Trust/SD acct.

My understanding (imperfect as it might be) is that the LLC will protect your name from a judgement. They may get a judgement against the LLC but not you. You may have to pay in the end but it won't be on your name. Maybe a lawyer can give a better explanation.

I'm working on a similar strategy as Robin.

The advantage to an Illinois land trust is that you can change the beneficiary without changing the deed. The beneficiary could be an LLC, your kid, another trust, etc and all that you need to do it is a piece of paper that says it (notarizing the change would be smart too but not technically required).

You could sell the property and sell the trust as in keep the property in the name of the trust and change the beneficiary to the new owner.

Having a management LLC and a house LLC will only result in both companies getting sued.

We have two LLCs. One for the properties in one county, and one for the properties in another. Plus a property in an IRA Trust Account.

The two LLCs were just to easily divide the properties for the kids. One gets one county, one gets another, and the third gets the IRA.

But due to the issue with the mortgage company having a cow about one of the properties, we had to change that deed back to our name and now I don't know what to do with it...

Dan of NY. On mrlandlord.com go to books and order ALLCI Premier LLC’s once you read it then determine if your LLC is structured properly. Also consider DLLCLLC Master Machine. This is more expensive but its in-depth on how to setup and the positive and negatives of different LLC structures.

You don't have to have an LLC to keep the properties out of your name(s). We have a large umbrella policy for protection, and homes are in a trust.

We also have a DBA management name, that is on all of our leases. We had to file for an assumed name (aka fictitious name) certificate at our local courthouse. When we file Pay or Quits, that assumed name ("xxxxx Realty Management") goes on all of the paperwork and in the court records.

Rental tax stuff is filed on Schedule E along with our personal tax return. (We have EIN #'s also, though they are rarely used.)

I have a trust for myself and my own home and an LLC with my brother for our 2 rental properties, one in CA and one in AZ. I'll say that neither of them are worth the hassle. I am done with refi-ing now but when I was refi-ing my house I'd have to take it OUT of the trust with a quit claim, get the refi done and then put it back in the trust. No bank would refi with a trust ownership. I guess I could do yet another trip to the county office and do another quit claim and attempt to fill the form out 100% correctly and exactly to put it back in the trust.

The LLC is useless, too, since banks, lenders, title companies and insurance companies don't deal with LLCs for (example) property insurance or loans; they insist on putting the policies/loans in our names as individuals and not the LLC. Maybe a true business insurance company would deal with our LLC but the costs would be much higher. Same with the $1.5M umbrella coverage policy; no to the LLC, yes to me as an individual with my regular insurance carrier.

And any court will just see right through the LLC straight to us anyway, even with our separate LLC banking, credit cards, tax returns, business paperwork, "official letterhead", etc. They know it's just the two of us.

One form of LLCs that is reasonably creative, is to have 2 sub-LLCs in your big cover all LLC. In Sub LLC, A you would put all of your real estate of Value in sub LLC A. This very valuable item of real estate, say a large hundred unit apartment building would be located in sub LLC. A. Now you create another's LLC and name it B. All of your activities that would be performed and managed in the 100 unit apartment complex would be performed under the sub LLC.B . All functions and activities in your large overview LLC would be performed in sub-LLC. B.

So, let's say some accident happened in your 100 apartment complex. Since there are no physical activities in sub-LLC.A, the person who had any injury from the accident would not want to sue sub LLC, A., They could only sue sub LLC B. But let's remember sub LLC B though is responsible for any activity in the 100 unit apartment complex, it only has the management activities but has no monetary value with its sub LLC B activities. It only manages the 100 unit apartment complex. Sub LLC B has no monetary value, only management value. So any lawsuit against sub LLC B would not be able to be rewarded any money from a charging order created by a court.

sit your attorney, your cpa and your insurance agent in the same room. know what youra ssets, debts, family situation, and goals are. Prioritize what is important to you... asset protection, "secrecy", tax advantages, estate planning. Then figure it out.