Best entities for Buying and holding?
I'm planning on buying and holding apartment buildings and should have my first deal (24 units) under contract within a week and closed 2-3 weeks after that.
Here's what I had in mind. I'd be interested in your opinions. I want to be as anonymous as possible, have maximum liability protection, and maximum tax benefits. (All names below are ficticious)
1. I buy Apartment building A
2. I put it in the "Bahamas Land Trust"
3. It is Owned by "Johnson, Smith, and associates" LLC (as the benificiary to the above trust)
4. "AAA property management" LLC is the trustee of the Bahamas land trust
...and "Rich investments" LLC is the holding company of all of the other LLC's.
The land trust makes it difficult to find out who actually owns the property. (I would have it moved into a land trust before I purchase the property and then have it assigned to me). Although cheezy, It would make it look (at first glance) like an offshore organization (and in the future it might be).
I would want the beneficiary LLC to look like a law firm (not fun people to sue). It would allow the holding company to place liens against the property and pay most of it's profits to the holding company. (ie, no liquid assets, low income, and very little you could get from a lawsuit)
The trustee llc would manage the property and the management companies. It would be "doing" the most and perhaps have more potential liability, but it wouldn't own anything and it would not make very much money. (again, not a good entity to sue)
the holding company would do absolutly nothing (no liability) and make all of the money. It would place liens against the properties for outstanding debts that would be created.
Would any of these be best set up out of Nevada?
Is this overkill?
Would any of them be better off as S corps, C corps, or FLP's (family limited partnerships)?
I'd love criticism, kudos, or suggestions.
Thanks.
Have you been reading Bronchick again?
If you are going to be doing work on the property, or acting as a manager, are you personally covered under some umbrella policy?
Your assets are covered, but, if you get sued for assault?
Seems like more legal fees than noi to me.
Good luck
Nope. Who's Bronchick?
How would you recommend structuring an umbrella policy? (under your property insurance or personal insurance?)