LLC for state I live in or invest in?

5 Replies

Hello, Small investor from Boston Ma area...Looking to invest out of state in large multi family. Would I open an LLC in the state I am investing in or the state in which I reside? Thanks in advance!

You can do either. If you're trying to keep it simple, I would open it in MA. Otherwise, you're going to have to do reporting to another state and pay their annual fees.

Well, if you own property in another state then you are doing business in that state. If your LLC is not formed there, then you will have to register as a foreign entity. That means you will be paying the annual fees in both MA AND the state you are investing. It is typically better to just form the LLC in the state where you are doing business to avoid that.

@Rich Thomas , I agree with @Edward B. here. I formed my LLC in Kentucky where I live (and where I expected to invest at the time). I am now investing in Tennessee. I have to pay Kentucky's $175 LLET every year (along with other minor fees, like annual filing which isn't much) AND I had to register my LLC in TN and pay $300/yr to them. So almost $500/yr on (what I consider to be) nonsense.

I probably could have done it in a more efficient way, but I did the best I could with what I knew at the time.  

@Rich Thomas I am not an attorney, but the advice I have heard attorneys give my clients is to form the LLC in the state where they are investing.

Depends on what you think your cash flows will be. If it's a decent amount, then file an LLC in the state you're purchasing the asset.

Not an attorney and this is not legal advice.

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