Understanding LLCs in multiple states

[Matthew Sperry]

Hello! We have two properties in 2 different states and we want to put them and future rentals in an LLC. Can we register ONE LLC in ONE state in which we can put out-of-state properties or do we need an LLC in each state where we have properties?

Thanks! 

[Russell Brazil]

Most people who move their properties into LLCs do so improperly. If you are doing this in an attempt to limit your liability, you will need to also refinance to a loan in the LLCs name, and change your insurance coverage to a commercial policy. Both of these things will drive up your costs.

[Matthew Sperry]

Thanks for the tip! 

[Nick Belsky]

@Matthew Sperry

You'd need to check with each state to see their requirements. Normally, you can base your LLC in one state then be approved to do business in others by registering as a foreign entity with each state's Secretary of State. Most states allow this but some do not and you would need a separate LLC for those. You could also use a holding company to umbrella the individual entities as well. For example, my holding company is based in Florida. I own rentals in Ohio and Texas, each with their own entity. Those entities are owned by my FL holding company. I was not required to register my holding company as a foreign entity in either state. You should run this by an attorney to be sure, either way.

Cheers!

[Matthew Sperry]

@Nick Belsky, thank you so much!