Forced into real estate investing due to California market
27 Replies
Kyle Phelps
posted about 1 year ago
Hello all! Nice to meet you BP! My name is Kyle and this is what my current venture into my own bigger pockets looks like so far
Short synopsis, Single, 50% custody, [100%]father. Finally had a divorce finalize about 10 months ago. Had to sell the house in the divorce. Made a tidy profit. This money has been sitting while I save to purchase a SFH big enough for my daughter and I and our needs. I am tied to my location and reasonable traveling distance to maintain my half of custody. Long story short I am unable to afford my market in a reasonable amount of time and would really like to get into my own place. Saving the $500-$750 a month (I have been saving) after slashing my spending.... is going to take forever to get where I need to be.
Upon my last bout with lenders and the cost of buying and the monthly mortgage , I realized I need to make more monthly, fall in love and buy with a new girl (uhhhhhhh....rather be independent at this point), save faster, get a higher paying job... etc .... My current job, while not the best paying allows me to work my own schedule so my daughter almost never goes to a sitter when I have her, so I'd rather not get a regular job (while paying me more will force me to sacrifice these formidable years). I have started driving Uber when my daughter is at her moms, and this is a lot of fun and makes some money (with having a paid off Camry hybrid).
So I thought I would start flipping houses. I have enough connections and experience in this area that I started getting excited and doing research in the area....
I started making calls, talking to a trusted real estate agent, coordinating with my construction friends, researching how LLCS work, etc. Spent tons of time watching bigger pockets, Clint Coons, etc on youtube explain how this stuff works
Talked to some lenders ..... the money down and rehab costs would drain my savings on the first go. After the rehab if there was any trouble selling quickly or hick ups in the rehab, I could lose everything. I was distraught and felt helpless.... I was not comfortable putting all of my savings into my first, very expensive, venture into this side of real estate.
Right as I was hearing another contractor give me very general costs of how my bank account was going to be at $0.... I discovered "roofstocks" and my horizons immediately changed, and now I am looking to invest in rentals with cash flow out of state. I would love to have 4 investment properties before 2021 and if I have less than 2 , I will have not met my goal.
The market in California, is just too expensive for a newbie without a massive operating fund to start out. Due to their limited stock of roofstocks, I have begun reaching out to real estate agents in markets I have been looking at.... more on this later. Also feel free to give pointers on using roofstocks, I love their business model and would love to use it
Short synopsis? Maybe not ...
So where I am currently at ....
---I am ready to start an LLC in Wyoming today! I want a nominee manager for total anonymity. I am pretty sure this requires a partnership , producing a 1065, and a k-1.... but I don't have a partner in this ... I would love to jump on an automated service and get this set up with out having to pay lawyers a ton of money to do it for me! SOMEONE HOLD MY HAND !! Lol. So since I am so new at this I have been signing up for consultations that are typically 2 weeks out. I want to know its done right. Is it as simple a a "legal zoom" 10 minute click through? Don't get me wrong. I am not against paying lawyers, but I want to expedite cash flow before I put a lawyer on pay roll as a recurring expense.
Then of course setting up the second LLC (owned by the first LLC) in the state I look to invest in. Much less worried about pitfalls here.
Then when I have the property I need a trust set up to transfer the property into the LLC .... well, how do I do this if it's just myself running this operation and I want to maintain anonymity. Again I am still waiting for my consultations for professional advice.
Would really like to avoid paying thousands if this can easily be done on my own using a click through system like legalzoom, incfile, etc.... until I have the cash flow velocity I am comfortable with
---Second has been lending. The automated lenders on zillow, roofstocks, etc. dont like loans below $100k.... I could get one or 2 properties through these style of loans but that makes me nervous and after any repairs puts a serious crunch on my savings. There is a ton of houses in the markets I have been looking in that will have great cash flow below this $100k mark. I would love to get 3 or 4 instead of having all of my eggs in one or 2 baskets, while still having a good chunk of nest egg to deal with unexpected repairs, vacancies, etc. I have reached out to a couple lenders in markets I am looking at, I am waiting for them to call back. But curious about loans that dont require 25% down quickly draining my operating capital, while creating cash flowing. That way I could get more investment properties faster. I have heard something about "grants" where cities are offering free money to help rehab neighborhoods. What about 3% loans ... Fanny loans? Lenders havent mentioned much about these when talking to them. Not asking for a loan, just some pointers or maybe something I haven't mentioned. I am guessing the local market banks would be my best bet. Any types of loans I should look for or steer clear from?
--- Third has been which market. I have been looking in Orlando, Jacksonville, Indianapolis, Milwaukee, Detroit, KC, some places in AL. I am really leaning towards Indiana since I have family there. Using roofstocks seems great! They have property managers lined up and guaranteed rent, and a 30 day buy back ... but again the their inventory seems limited compared to what I have been seeing on zillow. Waiting on a real estate agent in the area to get back to me with local lenders ....
Anyway ... I am waiting by the phone to talk to professionals .... My biggest worries at this point is the legal aspect of all this and setting up the LLC properly and have more than once been one click away from forming the initial Wyoming LLC. Thank you in advance for your time and look forward to reading your responses
Marcus Auerbach
Real Estate Agent from Milwaukee - Mequon, WI
replied about 1 year ago
link
Marcus Auerbach
Real Estate Agent from Milwaukee - Mequon, WI
replied about 1 year ago
@Kyle Phelps congratulations on your new journey! Let me comment on one piece you seem to be hung up and running in circles. They say don't mistake movement for achievement; setting up a multi level entity structure does not make you an investor. Watch this: Brandon Turner on LLC
Kyle Phelps
replied about 1 year ago
Originally posted by @Marcus Auerbach :@Kyle Phelps congratulations on your new journey! Let me comment on one piece you seem to be hung up and running in circles. They say don't mistake movement for achievement; setting up a multi level entity structure does not make you an investor. Watch this: Brandon Turner on LLC
I'd have my first investment property if I could find a loan that
A: Didn't require most of my operating capital as a down payment
B. Was a smaller loan
I've talked to both of the loan companies that BP recommended me when you click in the "looking for a loan" ad in the forums. The first company would let me print up an approval letter anywhere from 55,000 to 165,000, but they wanted me to put in 30,000 no matter what. Well I need those funds to rehab and have a as a buffer, and personally I'd rather get 2 properties for 40,000 than one for 80k
I guess I'm just not looking into the right type of loans, or need to network and find investors. IDK
Jerry W.
(Moderator) -
Investor from Thermopolis, Wyoming
replied about 1 year ago
@Kyle Phelps , first, I understand that you arguably live in the most litigious state in the nation. That being said if you form an LLc and a Holding LLC bam right there you cost yourself at least $2K a year that could have funded insurance for over $2 million in protection. You don't need a Porsche to do Uber. A ford will work. I cannot imagine how you would need such massive liability protection for primarily passive income. California will tax you about $750 to $900 for every corporation or LLC you own regardless of where it is located. Next you will pay higher interest on all of your loans since you are getting commercial, not personal loans, and you will still have to personally guarantee every loan. If you look at every major player on BP, Brandon, Brian, you name it, NONE of them use this complicated anonymous system. Not one. Yes it can protect you, but so can paying someone to drive you everywhere in a bus with you as the only passenger. Yes it is safer, but it is unreasonable. There may be situations that being on a big bus would save you from death or injury if you are rear ended from a semi truck, but really it is an unreasonable level of protection. Just get a vehicle with a seat belt and air bags and drive safely.
Buy your first few rentals in your personal name and buy really good insurance. Next if you scale up get an LLC and good insurance. Now if you want to run a bar then by all means get an LLC, a Trust and an operating LLC over top of that. This business has risk, but most of it is financial decisions, very , very few investors have probably been put out of business by law suits. Many investors have been put out of business from not making money.
Keep in mind that I charge people for creating LLCs, and I am still not recomending the Clint Coons super duper protection.
Either way bud keep pushing. it can be hard, but you can make it, many others have succeeded just as you can. Best of luck.
Kyle Phelps
replied about 1 year ago
Originally posted by @Jerry W. :@Kyle Phelps, first, I understand that you arguably live in the most litigious state in the nation. That being said if you form an LLc and a Holding LLC bam right there you cost yourself at least $2K a year that could have funded insurance for over $2 million in protection. You don't need a Porsche to do Uber. A ford will work. I cannot imagine how you would need such massive liability protection for primarily passive income. California will tax you about $750 to $900 for every corporation or LLC you own regardless of where it is located. Next you will pay higher interest on all of your loans since you are getting commercial, not personal loans, and you will still have to personally guarantee every loan. If you look at every major player on BP, Brandon, Brian, you name it, NONE of them use this complicated anonymous system. Not one. Yes it can protect you, but so can paying someone to drive you everywhere in a bus with you as the only passenger. Yes it is safer, but it is unreasonable. There may be situations that being on a big bus would save you from death or injury if you are rear ended from a semi truck, but really it is an unreasonable level of protection. Just get a vehicle with a seat belt and air bags and drive safely.
Buy your first few rentals in your personal name and buy really good insurance. Next if you scale up get an LLC and good insurance. Now if you want to run a bar then by all means get an LLC, a Trust and an operating LLC over top of that. This business has risk, but most of it is financial decisions, very , very few investors have probably been put out of business by law suits. Many investors have been put out of business from not making money.
Keep in mind that I charge people for creating LLCs, and I am still not recomending the Clint Coons super duper protection.
Either way bud keep pushing. it can be hard, but you can make it, many others have succeeded just as you can. Best of luck.
I was never considering a California LLC.
When I start an LLC the holding LLC is going to be in Wyoming and an operating LLC will be in the state in which I invest. Since I have family in Indiana that's where I have been focusing my search.
Wyoming and Indiana are substantially cheaper than California.
I am unable to find anywhere I would have to register an LCC with the state of California if I'm not doing business in California. Maybe I'm missing something
Jerry W.
(Moderator) -
Investor from Thermopolis, Wyoming
replied about 1 year ago
@Kyle Phelps , you are missing something huge. California will tax you regardless of where you form an LLC or where the property is. Call and talk to a California accountant. It is a crazy bad tax. I am sorry to be the bearer of bad news, but CA is probably the absolutely worst state for high taxes. It is hard to believe that a state with massive wealth, silicon valley, Hollywood, Los Angeles, San Francisco, etc., can tax so much and be so broke. The politics there are crazy. There court cases are so weird they are often distinguished just because they are a CA case. Absolutely beautiful place, simply amazing weather, no idea how they went so strange.
Caleb Heimsoth
Rental Property Investor from Durham, NC
replied about 1 year ago
@Kyle Phelps setting up Llc’s in Wyoming me any other state Is a waste of time and money my friend. Don’t fall for the llc trap
Kyle Phelps
replied about 1 year ago
Originally posted by @Jerry W. :@Kyle Phelps, you are missing something huge. California will tax you regardless of where you form an LLC or where the property is. Call and talk to a California accountant. It is a crazy bad tax. I am sorry to be the bearer of bad news, but CA is probably the absolutely worst state for high taxes. It is hard to believe that a state with massive wealth, silicon valley, Hollywood, Los Angeles, San Francisco, etc., can tax so much and be so broke. The politics there are crazy. There court cases are so weird they are often distinguished just because they are a CA case. Absolutely beautiful place, simply amazing weather, no idea how they went so strange.
I appreciate the heads up. Wasn't going to set up an LLC until I talked to some professionals for sure.
My main concern is about avoiding mistakes and minimizing risks. That's the main reason in looking at setting up an LLC.
On another note it sounds like I am probably going to brrrr starting with a rehab loan. I have found a licensed loan agent that isn't asking for a huge amount down
John Teachout
Rental Property Investor from Concord, GA
replied about 1 year ago
Keep exploring your options. You are being careful and methodical but also have goals. You'll likely succeed in these investment endeavors. Investing out of state has its pitfalls but based on where you live, I realize your options are limited.
Account Closed
replied about 1 year ago@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
Will Barnard
(Moderator) -
Developer from Santa Clarita, CA
replied about 1 year ago
Originally posted by @Account Closed :@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
I'm not quite sure Jerry W was correct but I do need clarification on what was being referred to. If you live in CA but invest in a property, say in AZ and form an AZ LLC, you as a CA resident do not need to pay the annual $800 franchise tax fee. If you formed an entity in CA, then yes and if you invested in CA but formed a entity in another state, then yes, you would still need to register that entity as a foreign entity in CA and pay the franchise tax.
Now, if he was referring to income taxes, then correct, no matter what state you form the entity in and no matter what state the income is derived from, CA will still hit you with the high state income tax in addition to the federal tax.
Kyle Phelps
replied about 1 year ago
Originally posted by @Account Closed :@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
Aren't you missing out on tax benefits by not forming an LLC? I can understand that being negated if California does impose the franchise tax.
I'm still unable to find anything concrete on California imposing the franchise tax, when I don't have any customers in California. "Doing business in California" without a customer in California blows my mind, if they do impose that.
If they do impose franchise taxes on California residents forming out off state LLCs, doing business out of state.... I wonder if maybe it would beneficial to be a salaried, w-2 employee. As apposed to a member/manager.
I get that with just one or 2 investment properties out of state may not make financial sense, but later down the road
Kyle Phelps
replied about 1 year ago
Originally posted by @Will Barnard :Originally posted by @Saj Shah:@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
I'm not quite sure Jerry W was correct but I do need clarification on what was being referred to. If you live in CA but invest in a property, say in AZ and form an AZ LLC, you as a CA resident do not need to pay the annual $800 franchise tax fee. If you formed an entity in CA, then yes and if you invested in CA but formed a entity in another state, then yes, you would still need to register that entity as a foreign entity in CA and pay the franchise tax.
Now, if he was referring to income taxes, then correct, no matter what state you form the entity in and no matter what state the income is derived from, CA will still hit you with the high state income tax in addition to the federal tax.
That's what I was under the impression of.
Neal Stanfield
New to Real Estate from Denver, Colorado
replied about 1 year ago
@Kyle Phelps hi Kyle. Where can I find the “looking for a loan ad” you were referring to?
Kyle Phelps
replied about 1 year ago
Originally posted by @Neal Stanfield :@Kyle Phelps hi Kyle. Where can I find the “looking for a loan ad” you were referring to?
I'm unable to get to it on mobile. But on desktop you have an option to go to the sub forum where it shows at the related topics. Right in the middle there's a supposed ad
Steve K.
from Honolulu, HI
replied about 1 year ago
Originally posted by @Kyle Phelps :Originally posted by @Marcus Auerbach:@Kyle Phelps congratulations on your new journey! Let me comment on one piece you seem to be hung up and running in circles. They say don't mistake movement for achievement; setting up a multi level entity structure does not make you an investor. Watch this: Brandon Turner on LLC
I'd have my first investment property if I could find a loan that
A: Didn't require most of my operating capital as a down payment
B. Was a smaller loan
I've talked to both of the loan companies that BP recommended me when you click in the "looking for a loan" ad in the forums. The first company would let me print up an approval letter anywhere from 55,000 to 165,000, but they wanted me to put in 30,000 no matter what. Well I need those funds to rehab and have a as a buffer, and personally I'd rather get 2 properties for 40,000 than one for 80k
I guess I'm just not looking into the right type of loans, or need to network and find investors. IDK
don't buy $40k houses if you are not experienced and live in the area...
Will Barnard
(Moderator) -
Developer from Santa Clarita, CA
replied about 1 year ago
Originally posted by @Kyle Phelps :Originally posted by @Saj Shah:@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
Aren't you missing out on tax benefits by not forming an LLC? I can understand that being negated if California does impose the franchise tax.
I'm still unable to find anything concrete on California imposing the franchise tax, when I don't have any customers in California. "Doing business in California" without a customer in California blows my mind, if they do impose that.
If they do impose franchise taxes on California residents forming out off state LLCs, doing business out of state.... I wonder if maybe it would beneficial to be a salaried, w-2 employee. As apposed to a member/manager.
I get that with just one or 2 investment properties out of state may not make financial sense, but later down the road
There are no tax benefits to using an LLC, an LLC is a pass through entity which the income passes from the entity to your personal taxes via a K-1. The LLC is mainly for liability protection. An S Corp will have some tax advantages but you need to speak with your CPA as to how and how much.
Kyle, you are correct, CA does not impose franchise tax fees on an entity formed in another state where the property is also located in another state. If you tried to form an entity in another state to do business here in CA, then yes, they would charge you the $800 franchise tax.
Ricardo P.
from San Diego, CA
replied about 1 year ago
Originally posted by @Will Barnard :Originally posted by @Kyle Phelps:Originally posted by @Saj Shah:@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
Aren't you missing out on tax benefits by not forming an LLC? I can understand that being negated if California does impose the franchise tax.
I'm still unable to find anything concrete on California imposing the franchise tax, when I don't have any customers in California. "Doing business in California" without a customer in California blows my mind, if they do impose that.
If they do impose franchise taxes on California residents forming out off state LLCs, doing business out of state.... I wonder if maybe it would beneficial to be a salaried, w-2 employee. As apposed to a member/manager.
I get that with just one or 2 investment properties out of state may not make financial sense, but later down the road
There are no tax benefits to using an LLC, an LLC is a pass through entity which the income passes from the entity to your personal taxes via a K-1. The LLC is mainly for liability protection. An S Corp will have some tax advantages but you need to speak with your CPA as to how and how much.
Kyle, you are correct, CA does not impose franchise tax fees on an entity formed in another state where the property is also located in another state. If you tried to form an entity in another state to do business here in CA, then yes, they would charge you the $800 franchise tax.
This is not correct. California imposes the $800 annual fee regardless of where the entity is formed or what state the property is located. It's absolutely crazy but that's California for you.
Will Barnard
(Moderator) -
Developer from Santa Clarita, CA
replied about 1 year ago
Originally posted by @Ricardo P. :Originally posted by @Will Barnard:Originally posted by @Kyle Phelps:Originally posted by @Saj Shah:@Kyle Phelps brotha you don't need an LLC. Like @Jerry W. says you need good insurance.
I drank the LLC "kool-aid" when I owned 20 houses in Detroit under 20 LLCs. It was stupid, expensive, and time consuming.
Even now with close to 40 units in CA, most of it is in my personal name with a $5M umbrella policy.
Everything Jerry said was correct, except that CA is broke. Very large budget surplus my friend! Perhaps they can lower the taxes now :)
Aren't you missing out on tax benefits by not forming an LLC? I can understand that being negated if California does impose the franchise tax.
I'm still unable to find anything concrete on California imposing the franchise tax, when I don't have any customers in California. "Doing business in California" without a customer in California blows my mind, if they do impose that.
If they do impose franchise taxes on California residents forming out off state LLCs, doing business out of state.... I wonder if maybe it would beneficial to be a salaried, w-2 employee. As apposed to a member/manager.
I get that with just one or 2 investment properties out of state may not make financial sense, but later down the road
There are no tax benefits to using an LLC, an LLC is a pass through entity which the income passes from the entity to your personal taxes via a K-1. The LLC is mainly for liability protection. An S Corp will have some tax advantages but you need to speak with your CPA as to how and how much.
Kyle, you are correct, CA does not impose franchise tax fees on an entity formed in another state where the property is also located in another state. If you tried to form an entity in another state to do business here in CA, then yes, they would charge you the $800 franchise tax.
This is not correct. California imposes the $800 annual fee regardless of where the entity is formed or what state the property is located. It's absolutely crazy but that's California for you.
Can you post this info from the State showing this is true? I have had multiple entities in TX in the past which held my real estate assets in TX, living in CA and was never charged by the Franchise Tax Board for my TX entities. So unless something has changed recently you can point too, I don’t think you are correct. According to my info, you must engage in business in the state of CA to be liable for the franchise tax of an entity out of state.
Ricardo P.
from San Diego, CA
replied about 1 year ago
Can you post this info from the State showing this is true? I have had multiple entities in TX in the past which held my real estate assets in TX, living in CA and was never charged by the Franchise Tax Board for my TX entities. So unless something has changed recently you can point too, I don’t think you are correct.
From the FTB:
Example 1
Paul is a California resident and a member of a Nevada LLC. The Nevada LLC owns property in Nevada. The LLC hires a Nevada management company to collect rents and provide maintenance. Paul has the right to hire and fire the management company. He occasionally has telephone discussions from California with the management company in Nevada regarding the property. He is ultimately responsible for the property and oversees the management company. Paul conducts business in California on behalf of the LLC. The LLC must file Form 568.
There's been numerous discussions on BP about this and CPA's agree that in this scenario you are required to pay the $800 as ridiculous as it sounds.
Will Barnard
(Moderator) -
Developer from Santa Clarita, CA
replied about 1 year ago
Ricardo, thanks for posting that. I am rarely surprised at things and rules CA institutes but this one is a bit crazy. I guess I need to speak with my accountant to verify but based on that one sample exert you posted, I stand corrected, thank you.
Although I guess one could argue that you never made any calls to the management company from CA and Always traveled to NV (in that example) to conduct the business and affairs of that entity. Perhaps some grey areas exist.
Katie Lepore
Attorney and CPA from San Diego, CA
replied about 1 year ago
California is a sort of beastly state when it comes to taxes and filings. Even if you create a non-CA LLC, if you are managing the business from California, you will be deemed to be "doing business" in California and therefore subject to CA taxes. California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k. So, if you create an LLC in another state, you will need to register it as a foreign LLC in California. Though, this process will be the same for the other state (if you created a CA LLC you will need to register it as a foreign LLC in the state in which you are doing business/holding property). This means that you will need to pay registration and filing fees in at least 2 states if you don't buy CA property.
This article goes into a lot of the considerations about whether to form an LLC or not: https://www.mmpph.com/wp-conte... You don't always need an LLC though, and sometimes an umbrella policy is sufficient (and even advisable).
Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the “cause of action” arose in that state. So even if you pick a state with stronger protections like WY or NV, the cause of action arose in the state where the tenant fell, so likely that the court where the accident happened would have jurisdiction.
California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts. It also is helpful to have a California LLC in case you ever sell that property and move into another state so that you do not need to form a new LLC altogether with new operating agreement, just re-register in the new state as a new foreign LLC. Also, the state of formation is likely where internal disputes would be brought among LLC members, so if you and a partner live in CA, you probably want to arbitrate in CA if the two of you had a disagreement. But, that is not always the right answer and you should speak with someone familiar with your personal situation to get advice specific to you.
Couple other links about the doing business aspect:
https://www.biggerpockets.com/...
https://www.realestatelandusea...
*This post is informational only and is not to be relied upon. Readers are advised to seek professional advice. This post does not create an attorney-client or CPA-client relationship.
Ricardo P.
from San Diego, CA
replied about 1 year ago
@Will Barnard Yeah, beliebe me when I first started investing out of state and heard about this I was left in shock at the outrageous over reach by the FTB. It kind of hard to be surprised any more at the lengths CA will go to to get money.
Will Barnard
(Moderator) -
Developer from Santa Clarita, CA
replied about 1 year ago
@Katie Lepore - Thanks for the clarifications. CA and the politics behind it never ceases to amaze me and as frustrating as it is, it remains (in my opinion) the best place to live for a number of reasons.