There is no real need to have a separate LLC for every rental.
Yes, this of course goes against the principles of coaches who conduct those live real estate workshops.
You can add as many rentals into your LLC but then again you can’t have 12 properties into one LLC. That’s where you start adding risk to your portfolio.
If a tenant or a contractor sues one of your properties, the remaining 11 also get pulled in. But at the same time, if you decided to have 12 separate LLCs for those 12 properties, you are talking added costs here- filings, maintenance, registered agent costs, annual excise/franchise taxes etc.
As an example, a good strategy to is to bunch up low income, low equity rentals into one LLC. You are protected with the LLC and rarely will you find someone chase your low equity rentals..
On the other hand, to have a storage or a multi unit or a commercial space each structured under its own unique LLC sounds right. High net worth properties need to be separated from high risk properties.
# 3– You can also think of having some of your New Mexico rentals under one LLC simply because of their location in one state. And the other 2 TX rentals under a TX LLC.
Bottom Line: An LLC for every rental is probably not necessary. You can structure your rentals based on the amount of equity you have in each of your properties, where they are located and which properties have the most risk of a potential lawsuit.
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