You’re used to putting everything in your name—your phone bill, your first car, your Amazon Prime account, even your first rental property.

But if you’re working in the commercial or multifamily arena and still holding assets in your personal name… that’s like showing up to a sword fight wearing a paper towel cape.

Let’s fix that.

In almost every context you hear me talking about commercial real estate, the main things I often reference are protecting investor capital and minimizing risk.

Asset separation and asset protection, in short, are two of the simplest ways to do both:

Asset protection = protecting YOU
Asset separation = protecting EACH PROPERTY you own from the others

Together, they make sure one bad day doesn’t turn into a bad decade.

LLC = Your Legal Armor

A Limited Liability Company (LLC) is one of the most important tools in a real estate investor’s playbook.

Here’s what it really does:

• Limits your personal liability: If someone slips on a staircase or files a lawsuit, they’re suing the LLC connected to that property —not you.

• Separates your assets: Set up one LLC per property to keep one bad deal or legal issue from infecting your entire portfolio.

• Gives you credibility: To lenders, partners, and investors, you look like a serious operator—not just someone testing the waters.

It’s not a loophole. It’s a structure—and it’s industry standard in commercial real estate.

Sample Scenario:

Let’s say you picked up a small 6-unit multifamily with some light renovations. You kept it simple—titled it in your own name, just like the last duplex you bought. You figured: what could go wrong?

Fast forward six months. A tenant’s guest falls on an icy patch on the entrance stairs during a winter storm. They break a hip. Their attorney finds out you, personally, own the property.

You’re not just exposed to a lawsuit for the building—you’re exposed for everything else you own, too. That’s your primary home. Your savings account. Maybe even that new single family rental you just put under contract.

All because the building was in your name.

Now imagine the same situation—but the property is owned by an LLC. The lawsuit can only go after the LLC’s assets (in this case, the property itself). Your personal home, savings, and other properties are protected and will not be affected.

Why Asset Protection AND Asset Separation Matter

Asset Protection

This is about keeping your personal wealth safe. If you’re sued personally because your property is in your personal name, everything that’s not legally protected is fair game. Even if your retirement funds are shielded, your savings, equity in your home, child’s college fund, or future earnings could be targeted. When your property is in an LLC, your personal name isn’t on the deed, which means a legal claim against the property doesn’t automatically open the door to your personal finances.

Asset Separation

This is about isolating each property’s risk. You wouldn’t want a tenant problem in Property A to jeopardize Property B (or C, or D). By using separate LLCs, you keep each “business” legally isolated.

Think of it like storing valuables in separate fireproof safes instead of one big box.

When Should You Set Up an LLC?

Here’s a quick cheat sheet to know when it’s time to make the move:

Common Mistakes to Avoid

1. Setting up the LLC after the purchase
   Having to go through and retitle currently owned investments can trigger taxes, title issues, and lender complications. Always form your LLC before closing. It will make it easier for accounting and for your reference if you use the street # or street name for your LLC name.

2. Mixing personal and LLC finances
   I personally have one autopay account where all my personal bills account. And one account I use for my personal ‘allowance’. So mixing business with any of these is definitely a big no-no. You don’t want to combine funds into different accounts (e.g., paying property expenses from your personal account) can make your protection useless. Keep everything separate: business and personal bank accounts, credit cards, debit cards, etc.

3. DIYing the process
   Yes, you can file online. No, you shouldn’t wing it. Especially not if you’re raising capital, managing partners, or holding multiple assets. Seek a professional real estate attorney or

Who Can Help Me?

You’re not expected to figure this all out alone.

Here’s who should be on your team:

• Real Estate Attorney: Especially one who understands CRE and entity structuring. They’ll guide you on what type of LLC, how to draft an operating agreement, and how to manage compliance.

• CPA or Tax Advisor: They’ll advise on pass-through taxation, multi-member setups, and how to avoid landmines like self-employment tax or depreciation recapture.

• Commercial Lender: Some lenders require LLCs, some don’t—but most prefer it including all of the ones I work with. They want to see the structure of your business is sound. They can sometimes make professional referrals of attorneys or CPA’s.

Pro tip: Ask your lender before forming your LLC—so your name on the loan matches the legal structure from day one.

Next Steps: Your Action Plan

1. Decide which properties need separation or protection right now.

2. Schedule a call with a real estate attorney to talk structure (try looking through your LinkedIn).

3. Open separate bank accounts for each property’s LLC.

4. Get an EIN (tax ID) for each LLC through the IRS.gov (it’s free).

5. Keep good records—this will make your CPA and your future self very happy.

LLCs are one of the simplest, most powerful tools to shield your wealth. Don’t leave your properties or your bank accounts exposed. Real estate can make you wealthy. But only if you protect what you’re building.

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DISCLAIMER: This is not real estate, legal, or financial advice. Please contact your preferred attorney or financial adviser for help specific to your needs or issue.