Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
So I am looking to get some feedback on the pros and cons of having one LLC for two states. The LLC would be set up in the state of Texas where I reside and buy most of my properties. I am looking to buy some more properties in Mississippi. In order to simplify accounting purposes I was thinking of simply registering the Texas LLC in the state of Mississippi And buying Mississippi properties as well in this LLC that also would own Texas properties as well.
Attorney · Slidell, LA · Member since 2016 · 322 posts · 179 votes
4y
Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.
As a general rule, real estate holding LLCs should be created in the same state as the property. While some states have better protections for LLCs than others, when it comes to real estate courts only want to recognize local protections. In addition, the cost to create a new LLC is the same to register an old LLC, but now you also get two LLCs (and the asset protection protections that provides). Of course, the new LLC could be a subsidiary of the old one.
Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.
As a general rule, real estate holding LLCs should be created in the same state as the property. While some states have better protections for LLCs than others, when it comes to real estate courts only want to recognize local protections. In addition, the cost to create a new LLC is the same to register an old LLC, but now you also get two LLCs (and the asset protection protections that provides). Of course, the new LLC could be a subsidiary of the old one.
The issue for us is the additional accounting etc. for additional LLC's. That is one of the reasons we typically put more than one property into an LLC. Am I missing something?