I am looking to register a LLC in the state I live but I am looking mostly out of state for investing? Is this an issue? Or should I form a LLC in each state that I invest in?
Most states will require you have a registered agent in the other state, which typically costs about $100/yr. Some states require that your LLC be registered as a foreign entity and fees vary.
A bigger question is do you really need an LLC? What are you doing?
Thank you @Greg Scott for the follow up and thank you for asking about the need. Yes, to LLC or not to LLC that is the question...
Quick 10,000 ft. summary of our (my wife and I) real estate resume....
For the past 11 years we have managed a singe condo. We are now at a point to significantly grow our "portfolio". So now knowing and understanding the risk in having properties in our names. The decision of a LLC is only asset protection. Protection of our home and family. Honestly creating an LLC, marketing is currently not a priority. Closing on deals is the priority. We need to make progress, close on properties and start making an impact to communities. Once we have some momentum we will focus on domains, websites, marketing, etc...
A little off topic. We are just so eager to close on a deal and get started. But we also want to make sure that we are positioned that protects our home and family.
@Greg Scott , this might seem a basic question but I'm not understanding. The registration process of a LLC requires a "Principal Office Address". We do not have a brick and mortar so will a PO Box be required?
Every state is different and I'm not a lawyer.
In my experience, what the state wants is a location with a physical office in that sate so they can serve legal papers to someone. They usually like your personal address or the address of your attorney or a Resident Agent; I don't believe you can use a PO Box. The Resident Agent is basically someone that collects any mail for your LLC and forwards it on. There are many of them out there in every state.
In my own state, I have different strategies. If I'm not too worried about privacy, I use my personal address. If it is a property for holding an apartment, I don't want a savvy tenant tracking me down so I use a Resident Agent.
For other states, most require you have an address in their state. In my Texas LLCs, for example, my Texas attorney acts as my Resident Agent.
On the other hand, I do believe that LLCs are over-sold to investors. Most buy & hold single family risk protection can be handled by insurance.
Thank you so much @Greg Scott for the insight. We are only looking to establish a LLC for personal asset protection. We are looking to invest out of state which will increase our risk. The added layer of security will be helpful we are thinking.
I did mine in the state I live. If you get a lot of these or have high net worth you might want to think about a intermediary LLC to act as another firewall.
Thank you Lane for the insight. Intermediary LLC, do you group assets under multiple LLC's to limit the exposure? Am I understanding correctly?
@Joshua Tikal what did you end up doing? I'm in a similar situation myself currently - investing out of state and planning to register an LLC in that state for asset protection. I presume my attorney will act as my registered agent, but I haven't confirmed that yet.