How Many Real Estate Rental Investment Properties Can I Have Under an LLC?
In this video we discuss how many real estate investment properties you should have under one LLC. Many real estate investors do not know how many rental properties they can have under an LLC. In this video we discuss how many real estate investment properties you should have under one LLC in order to maximize the legal protection of your rental properties.
This video is intended for education purposes and should not be taken as legal, financial or tax advice. You should consult with a professional about your unique situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. are providing educational content to help small business owners and individuals become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc., Freedom Insurance Financial Inc., Freedom Realty Source Inc., and Freedom Immigration International Inc. or its members cannot be held liable for any use or misuse of this content.
One of the most common questions that we get here at freedom tax accounting is, how many real estate rental properties can I have under an LLC? or how many real estate rental properties should I have under an LLC? That’s what we are going to talk about in this video.
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Now, many real estate investors get a consultation with us here at FreedomTax Accounting, and one of the most common questions that they ask is, I want to form an LLC to buy real estate investment properties, but how many real estate investment properties can I have or should have under one LLC?
Now, the information that we are going to provide in this video is general information. We always suggest that you get a consultation so we can evaluate your specific case, because every case is different. If you want a consultation, please visit our website freedomtaxfl.com, schedule your consultation so we can evaluate your specific case and we can advise properly on this subject.
But in general terms, you can easily buy as many real estate properties as you want under an LLC. Now, that’s not legally wise, why? because you want to spread out the risk of your rental properties, meaning that if something happen on one of your rental properties, there’s a lawsuit, then the other rental properties that you have are not at risk; because if you buy all your rental properties under one LLC, that means that if there is an accident or something happens in one property, the lawsuit is against the LLC and now you are at risk of losing your others real estate rental properties in that lawsuit.
Now, if people want the highest level of legal protection, the highest level of risk protection, then you would need to form one LLC per real estate property, that way all your real estate properties are all separated into different LLCs; that’s the best legal protection, if that’s very important to you.
We and other professional feel that that’s kind of overkill, so we usually suggest that you can put several properties under one LLC, and once your properties equity reaches $250.000 dollars, now start buying properties under another LLC; you should not have more than $250.000 in rental property equity under a single LLC. Remember that equity is not home value; if you have your properties on cash, and you don’t have a mortgage, then the home value is your equity; but if you buy a property that its home value is $200.000 but you still owe a mortgage of $180.000, then you only have an equity of $20.000.
So, that’s what we recommend. You can put several properties under one LLC and once your equity reaches $250.000 dollars, then open up another LLC to buy more properties under a separate LLC. That’s what we recommend here at FreedomTax accounting.
Once again, every case is different, you should call for consultation so we can evaluate your case. Once you have $1.000.000 dollars in equity, then should form a holding company and that holding company be the owner of the other LLC; but that’s a more advanced real estate tax strategy.
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