Beginning Investor Location of LLC

[Anthony Wright]

I have been reading books and watching podcasts for the last few weeks. As I have been watching and reading and LLCs have been brought up. I have noticed their is a Rec commendation out there to start your first LLC in a state that has one either anonymity or two a charge order or both. That before you form the LLC in the area you plan to invest in, you need to ensure that LLC for the specific stare has external asset coverage. If not you should form your first LLC in Wyoming or Nevada. Has anyone else heard this from an attorney or another investor recommending this formation process? For instance I live in Washington state and I know the markets here right now are fairly high for a beginning investor especially in the Seattle area. So after reading Bigger Pockets books and watching podcasts I thought it might be good to start in the mid west: IL, IN, OH, WI or in the south east AL, SC or AR. I realize I would have to form an LLC in the state I choose to start investing with, but should not first from an LLC in one of those states mentioned above and do I still need to form an LLC in Washington? Thank you in advance for any advice Respectfully, Anthony Wright

[Michael Plaks]

@Anthony Wright

You are almost certainly referring to webinars by Clint Coon, an attorney from Anderson Advisors - a company (in)famous for recommending highly complicated entity structures from your Day 1 in real estate business. I'm sure there're benefits for such solutions for some investors, especially the bigger ones. I suspect that for a beginner investor, they're an overkill. However, I'm not an attorney, and my opinion on legal protection is not worth much, if anything.

I'm in total agreement with @Eamonn McElroy: practice KISS. It may even be no LLCs at all initially, as long as your attorney approves of it.

Also, for a beginner investor, I highly recommend starting investing in your own backyard - i.e. driveable distance from where you live and work. Not in other states.