How many &!%$#*^%$ LLCs do I need anyway?

There are many ways to do anything - it just depends on what makes sense.

For Real Estate you could hold all properties in a single LLC. You would then register that LLC in each state where you have property. If a tenant sues you, they will sue the LLC that holds title to the property.

The LLC will need to defend the suit in the state where the lawsuit was brought - the state where the property is - and should be registered in that state.

You register the LLC either by forming it in the state or doing a foreign registration if it was initially formed elsewhere. I have heard an attorney suggest that you not do a foreign registration until you are sued; but if your property is in a state that takes 6 weeks to do a foreign registration even when expedited, like AZ, that's a problem.

Here's where sense comes in. You would not want to put all your property into one LLC because in the case of a lawsuit, ALL property in the LLC is at risk.

Think of the LLC as a basket. If a suit is brought against the basket, everything in it could fall to the plaintiff to settle the judgment if you lose. And in any case, all of those assets (and their revenue) gets tied up until the case is resolved.

So you need to decide how much equity you are willing to risk in a single LLC. If you are planning to buy multiple properties in a single state, the best approach usually is to set up an LLC in that state.

If you are buying one property in each of 3 states, you can form an LLC in one of the states and do foreign registrations of the LLC in the other 2. Since a state typically charges more for foreign registration than for an entity set up in the state, and you still need a resident agent in each state, this is not necessarily a good strategy for saving money.

If you plan on being wealthy, better adjust your investing tactics accordingly.

Bye for now.

Smokey