What state should I set up my LLC in?

Question

I’m currently working in Ohio for the next 4-12 months. I’m from NC, and plan on moving back. I have 3 rentals, one in NC and two in IL.

I plan on purchasing more rentals in both IL and NC, and possibly even OH. Does it matter a great deal which one of these states I choose to file my LLC in? And I’m assuming I can lump all 3 of those rentals in one LLC even though they’re in different states. Also thanks for your help, this discord is extremely helpful.

Timothy Murphy III · Answer

Ohio law is also very business friendly when it comes to the corporate veil of LLCs or other incorporated entities. I've defended the corporate veil in Ohio before at trial, where a plaintiff attempted to pierce a business owner's corporate veil and pursue the owner's personal assets. Absent fraud, or heavy co-mingling of funds to the point where there no meaningful distinction between the business and the owner, the law dictates that the corporate veil holds up.

Doug Smith · Answer

Keep in mind that any State that you try to finance a property in, the lender will likely require you to register the "foreign" (meaning from another State) entity with that State. You can use an entity that is formed in another State, but you'll want to register it if you buy.

Jimmy Lieu · Answer

Hey Tyler, it's best to file your LLC in the state where you have the majority of your properties to simplify administrative and tax matters. Ohio offers favorable LLC fees and tax structures, making it an attractive option for real estate investors. I personally love Columbus Ohio and as someone who works with a lot of out of state investors - there's so many catalysts for why you should invest here. Specifically, there's job growth (Intel, Honda, Amazon, Nationwide, etc) and the population is growing (unlike Cleveland or Cincy). I really see Columbus Ohio as an extremely safe bet for the next 10-20 years. Plus, there's still so many positive cash flowing and 1% deals here in Columbus Ohio. As a local investor and agent here in Columbus, let me know if you have any questions or want to connect!

Malachi Weary · Answer

Hey Tyler, good work asking questions and taking action in the forum. Establishing an LLC in one of the 4 haven states could be an idea. This includes Delaware, Nevada, Wyoming and Alaska. These 4 states provide business and tax advantages to business owners and those looking to incorporate.  This is intended only to inform. Personal research is advised for clarity and specified understanding. Keep up the good work

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What state should I set up my LLC in?

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