Investor · Chicago, IL · Member since 2013 · 227 posts · 31 votes
Hi all,
I'm a new real estate investor in the State of Massachusetts and have been researching into getting an LLC for some added protection for my property. The goal is to get 5+ properties over the next 2-3 years.
On to my question.
In my research I found out that an LLC cost approx. $500 annually for each LLC. Also, that Series LLC's are not recognized by the state of massachusetts. However, after talking with a CPA, about out of state series LLC formation, I found out that I could still get a series LLC in one of the states where they are recognized. But I would pay the out of state LLC fee, then a foriegn LLC fee to the state of massachusetts.
Is this true? If I put each property under its own LLC, What would be the benefit of having a series LLC if I would end up having to pay an annual fee to 2 states for each separate property. And if its not recognized by the state, what are the legal ramifications?
Has anyone from massachusetts tried to set one of these up?
CT is similar where you would have to pay Foreign LLC fee. I was suggested to just open an LLC for each property. Not multiple properties under one LLC.
It is true, you will have to register your out of state LLC as a foreign corporation in MA if you buy property in that LLC. So you're then paying two LLC fees. It also makes an out of state series LLC of little value, in my opinion, since the whole point is to have multiple partitioned LLC's while only paying one set of fees. You'd have to register each series as a separate foreign company I believe. So simply set up an LLC for each property in MA. Cost of doing business. Or buy all your properties in one LLC.
As John Hyre says "Don't worry so much about asset protection until you have assets to protect". If that applies to you, then focus on insurance.
Not legal advice, just my understanding of how my attorney told me it applies to my situation, since all my companies that hold property are in NH.