A Series LLC is a form of a limited liability corporation, or LLC, where each series operates like a separate entity with individual names, bank accounts, and liability. Series LLCs, when filed properly, can be a fantastic tool for real estate investors with large rental portfolios. However, like most investment decisions there are pros and cons. We’ve broken down the pros and cons of Series LLCs for you:
-Reduced costs including:
-Segregation of assets adds an extra layer of liability protection
-Ability to have different members by series allows you to raise capital at the series level
-Series LLC regulations vary by state, which can cause discrepancies:
-It can be difficult to get EINs or bank accounts by series
-Many attorneys, accountants, lenders, and title companies are unfamiliar with them
For more information on Series LLCs, see this NOLO post "What is a Series LLC?", and for more benefits on holding rental properties through LLCs see our blog post, How Landlords Can Form LLCs. Before forming any legal entity, we always recommend consulting your counsel.