Mark Kohler explains Series LLCs, available in 15-17 states including Texas, which let one parent LLC own multiple sub-series without extra filings. You get liability protection for each property like separate LLCs but pay one tax return and lower fees. Investors with four to eight rentals should consider it.
Chapters
The series LLC is a really cool type of LLC. It's only offered in about 15 to 17 states. More and more states are adopting this type of llc. So if we're going to be investing in assets and we're going to buy rental property, here's what Horatio is up against. He could open two LLCs in Texas, which is one of the states that allow for this, and he could open two LLCs and go buy two rental properties. Now, why would he do that? Well, it's because he wants protection. He doesn't want both of his eggs in the same basket. If something goes wrong on this property, we want a wall, a fire wall to get over to this one. Well, a lot of people are like, well, I don't want to set up two LLCs, Mark. That's expensive. So what Texas did, along with these other states, to say, well, you can set up one LLC to help own all the property, file one tax return, keep costs down, and we're going to let you set up as many subseries, LLCs as you want at no extra cost. You can have these other little LLCs, and they all feed into 100% down into the parent. So this is called a Series LLC. And Series LLCs save administrative costs. Any reservation. Here's the reserv. If you're only going to own two properties, I'd probably both put them in the same llc. I wouldn't go for an extra series. But if your goal is to buy four to eight properties, then doing a series LLC is going to allow you to expand much more affordably and create barriers or buckets for all the different properties.
