Purchasing Real Estate with an out of state LLC

9 Replies

Does anyone know the repercussions of purchasing a property in Ohio, with an Arizona LLC?

I would purchase the property with my AZ LLC, then refinance after six months in my name, releasing title out of the LLC.

I know, I've also been told to just an Ohio LLC, but is that really necessary?

Your help is greatly appreciated!

-Blaine

Originally posted by @Blaine Moore :

Does anyone know the repercussions of purchasing a property in Ohio, with an Arizona LLC?

I would purchase the property with my AZ LLC, then refinance after six months in my name, releasing title out of the LLC.

I know, I've also been told to just an Ohio LLC, but is that really necessary?

Your help is greatly appreciated!

-Blaine

 I have some real estate lawyers in Columbus, Ohio you can reach out to

If you don't at least register the AZ LLC as a foreign entity in Ohio, the Ohio courts may not offer you the protection of an LLC. This means that an Ohio tenant could go after your personal assets if they got a judgment against you.

IMHO, it's worth it to either start an Ohio LLC or register the AZ LLC as a foreign entity in Ohio (see a local OH lawyer if you have questions about foreign registration).

Originally posted by @Remington Lyman :
Originally posted by @Blaine Moore:

Does anyone know the repercussions of purchasing a property in Ohio, with an Arizona LLC?

I would purchase the property with my AZ LLC, then refinance after six months in my name, releasing title out of the LLC.

I know, I've also been told to just an Ohio LLC, but is that really necessary?

Your help is greatly appreciated!

-Blaine

 I have some real estate lawyers in Columbus, Ohio you can reach out to

 

It comes down to comparing the up front and ongoing costs/time of forming a new LLC, which would likely be more expensive due to needing to draft a new operating agreement, vs. registering as a foreign entity, as @Pamela Sandberg points out. I can recommend an attorney in Cincinnati, if that's where your property is located.

@Blaine Moore there have been some good responses to your question already. The only thing I'd add is that if you're investing out of of state and you don't have a local partner where you're looking to invest, it'll be more difficult to get commercial financing. Portfolio lenders tends to make underwriting decisions in real life sitting around a table as opposed to letting computers calculate borrowability for them, and most of them won't lend to non-local borrowers. This doesn't directly relate to your LLC question, except that an Arizona person with an Arizona company won't be considered as favorably as if there were an Ohio person involved in ownership.