Where Should I Form an LLC if I'm an Out of State Investor?

[Megan Stafford]

Hi!

I own 3 properties (5 units) in Arkansas currently, but I live in California. I would love to know if anyone has advice on where I should set up my LLC?

I would like to do a couple of flips in the next 6 months and start putting all of my newly acquired fix & hold properties under the LLC as well.

As far as Arkansas and California go- it's much cheaper to get a business license in Arkansas so I am of course thinking that should be the state to get the license; however, can I still write off my rental payments in California for the portion of my home that is used as an office space even though all of my physical business is in Arkansas? I currently work about 20 hours a week in my home office here in California.

Thanks for any help you may give and I completely understand I should talk to a CPA and lawyer but recommendations are still welcome!