Nick Perry explains why a single LLC isn't enough for rental properties. Instead, use three layers: a rental LLC in your property's state, a Wyoming holding company above it for creditor protection, and a revocable living trust on top to avoid probate and pass assets to heirs tax-efficiently.
Never ever hold a rental property in just one LLC. One tenant slips on your porch and they can come after everything you own. So do what the richest investors do and build this 3-tier fortress. Layer 1 is the rental property LLC. You set it up in the state where the house sits. So if a tenant sues, the liability gets trapped right there. Then comes Layer 2, the Wyoming holding company, which is what owns your rental LLC, not you. So if you ever get sued personally, creditors can't touch your rentals because it has one of the strongest charging order protection there is. And Layer 3 is the revoke workable living trust. It sits at the very top and owns the holding company beneath it, so your whole empire stays out of probate court and your kids inherit everything privately and tax efficiently.
