Legal Question in Real Estate Law in New York

Re: LLC Entities and leveraging

You are right in thinking that using a single LLC to hold different real estate investments may result in increased legal exposure to various liabilities. Apart from litigation risks that can tie up the capital and assets of that LLC, you should consult your tax advisor to determine the most efficient tax structure to be able to offset gains with losses from different investments. Tax planning here is essential. You may want to consider having a structure with one holding company on top owning separate LLCs for each of the buildings. This way you can route the financing through the holding company and/or obtain financial leverage in acquiring additional properties and still enjoy limited liability for each separate investment. You may also need a separate company to provide management services for the buildings. I'd be pleased to assist you with the corporate aspects of this structure but much will depend on the tax advice you receive and your financing needs.

The above reply is in the nature of general information, is not legal advice and should not be relied on as such.

Re: LLC Entities and leveraging

More than likely you should not use one LLC to own and maintain various real properties, one of th eproblems you may encounter would be greater liabilty. There are important tax issues that you may want to consult your accountant about. Corporate matters such as these especially as they relate to real estate investments are our specialty, however, we would need some more information before making a complete and proper determination. You are welcome to contact us for a free consultation.

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Re: LLC Entities and leveraging

You should work closely with an attorney in setting these entities up and in executing the projects fom beginning to end.

You do not need to use one entity in order to leverage the value in each property for new deals. Guaranties and spreader agreements can often help you achieve those ends.