Always segregate your properties by titling them to separate LLCs. For example, we would title 15 rental properties to 15 separate LLCs. The liability from any one property won't then jeopardize any other properties. Of course, you must then form and administer 15 LLCs. But to simplify matters, Delaware, Oklahoma and several other states allow you to set up what is called a 'Series LLC.' A Series LLC allows you to establish a series of 'cells' within each LLC. Each cell within the series operates as a distinct LLC. Each cell can own different properties or businesses, have different managers and members, and separate operating agreements with different provisions. They may file consolidated or separate tax returns and otherwise operate autonomously from the other cells within the series. Liabilities from the property in each cell thus remains confined to the assets within that one cell. Properties titled to the other cells remain safe from creditors from any other cell. Those who need multiple LLCs or own multiple properties should consider the Series LLC.
The Series LLC is a new entity. So, one problem is that it hasn't been fully court-tested concerning its liability protection from the creditors from 'different' cells within the series. Nevertheless, more states are considering Series LLC legislation. The Series LLC may be the entity of the future for real estate investors that own a number of properties. You can own hundreds of different properties within the same Series LLC. And forming a new cell within the Series is as easy as computer downloading the name of a new cell. Moreover, you can use a Series LLC to own property in any state. If your properties are located in different states, you'd register the LLC as a foreign LLC in each state where you own properties; however, you needn't register each cell in that state. The Series LLC thus lets you avoid the expense of forming multiple LLCs; however, for protection, you must operate each cell autonomously.