Hello all - I live in Colorado and am looking to invest in Ohio with my dad. We are just getting started but have identified potential properties.
We are thinking of creating an LLC but not sure which type? Do we need to incorporate in Colorado or Ohio? We are trying to grow to around 10 rentals and outsource property management.
Any thoughts or advice would be greatly appreciated!
@Brooks Urich Welcome to BP. LLC's are easy here...Ohio is open for business...$99...a couple of small hoops for out-of-state guys, but still pretty painless. No maintenance fees.
Where are you guys focused? And what asset type/class?
If you are looking to buy multiple properties under a LLC, you may want to look at a series LLC. However, having an LLC can have its own drawbacks from a financing perspective. Obviously, consult with a RE attorney before doing anything.
Thank you guys for your help! Looking in greater Cincinnati area
Ohio does not recognize the series LLC. I use GFH in Cincinnati for company agreements, or you could go the online route since it's just your dad. If you will be using conventional financing, you will have to close in your personal names (and your names will be on the note). You can then deed the property to your LLC, but keep in mind that violates the due on sale clause of your mortgage. That being said, I have never heard of a lender calling a mortgage due in that scenario, as long as the payments are made. I have done it.
It's up to you how many properties you want to hold under each LLC. Obviously it costs to set each one up, but bundling them together increases your risk in the event of a lawsuit.