If an LLC owns the rental house, the tenant gets drunk and falls off the porch and decides it's your fault and sues you, they have to sue the owner of the house, which is the LLC.

I CALL THIS THIS, “THE REAL ESTATE NEXUS” ™️ 1️⃣ Create a Living Trust: You are the trustee, maintaining control while securing your legacy. 2️⃣ Establish a Holding Company: Formed in Wyoming (offering charging order protection and anonymity). The trust owns this holding company. 3️⃣ Set Up Real Estate Holding LLCs: Each LLC is formed in the state where the property is physically located and is owned by the holding company. 4️⃣ Form a Property Management LLC: This LLC is manager-managed by you and operates independently from the holding company. 5️⃣ Management Operations: • The Property Management LLC (PM LLC) is hired by the Real Estate Holding LLCs to handle leasing, repairs, and tenant management. • The PM LLC charges a 10% management fee from rental income. • Tenants pay rent to the PM LLC, which deducts its 10% fee and transfers the remaining amount to the Property Holding LLC. 6️⃣ Financial Flow: • The Property Holding LLC pays the mortgage, property taxes, and sets aside reserves for miscellaneous expenses. • Remaining profits are transferred to the Holding Company as a management fee or distribution, depending on the most tax-advantageous option given the cash flow. 7️⃣ Compensation Structure: • The Holding Company then pays you a distribution and/or salary if it’s taxed as an S-Corp, maximizing your tax savings. 8️⃣ Protection Layer: • All assets and operations are shielded by insurance coverage.