I'm thinking of establishing a Checkbook IRA / IRA LLC to make both real estate and non real estate investments. My question is does it matter which state I use for the LLC?
I think the real estate properties need to be owned by an LLC formed in the same state as the property (because nexus?) , but since each property should really be in a separate LLC, can't the root LLC be in a state with low fees / no reporting requirements like New Mexico?
Basically I'm asking if I can / should do this:
- Create an IRA LLC structure with the LLC being in New Mexico / Arizona
- Create nested LLCs for any real estate investments, ex. an Illinois LLC for an Illinois property
You can certainly setup a vehicle such as you propose. We recommend Missouri for LLC entities that do not have geographic nexus as MO is faster, less expensive, and easier to maintain than AZ, NM & WY. Your name is not in the public record with a MO LLC, so there is a nice anonymity factor as well.
Illinois is no longer as onerous with regard to fees as they used to be, at only $75/year. Having a single Illinois IRA LLC and just getting quality landlord insurance would also likely be a fine option and would be simpler to manage. How much you need asset segregation within the IRA LLC framework would depend on the dollars involved.
@Brian Eastman thanks for the response. What's easier about maintaining an Missouri LLC?
There is no required state filing annually. I guess similar in NM & AZ, but WY has a filing. Basically, my point is that MO has all the necessary positives for simplicity, low cost and anonymity.
There are certain restrictions on IRAs make sure you check with an IRA 3rd party before jumping into anything. We recommend Equity Trust to our members.
Check out Sunwest Trust. They are based in NM and we have had really good luck with them.
How do you deal with the registered agent section in the New Mexico LLC?
@Jon Rambis I would recommend determining your target state first and setup your LLC there. In my case I started my LLC in Michigan as that is where my first target investment was. Other states do have cheaper annual fees. Later your LLC can register in each new state as a a Foreign LLC as it grows.
@Christian Sifuentes - If the state requires a registered agent, you are out of luck. You will have to spend $80-100 annually for the agent. Michigan has this requirement. I just setup with InCorp, $67/year when purchased for 5 years.
I can not comment on the service yet, give me a few months then I can comment
Hi Brian Eastman,
I would like to establish a Checkbook IRA/IRA LLC in the state of Missouri and would like to know what documents I would need to file? Can you give me steps in order to file the LLC on my own? Also, can you have a dual account with both an IRA and IRA Roth? Please advise.