LLC based in CA doing business out of state

[Emma S.]

I'm about to set up an LLC to purchase my first out of state rental property.

Then I read some forum posts saying that an LLC based in one state & operating rentals in another has to register as a foreign entity in the other state too. That means double the paperwork & license fees ???

Secondly for CA LLC's, the Articles of Organization which has a $70 filing fee (in addition to the business license fee $151) also states on the form that: "LLCs in California may have to pay a minimum $800 yearly tax to the California Franchise Tax Board" Whoa!

Can those of you in CA in similar situation share your experience? Just seems like a lot of trouble & wondering if I should just buy the property in my name & forget about the LLC for now?

[Ali Boone]

I'm in SoCal and buy out-of-state rentals and I won't set up an LLC. You can't avoid the CA fees even if the properties are out-of-state (trust me, I tried).

I wrote an article on this exact topic, definitely read through the comments. You'll learn more about LLCs than you had ever hoped! :) Then you can make an educated decision.

http://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/

Where are you buying out-of-state?