Should I establish my LLC in my own state?

Question

Hello all!  Newb still working on the first purchase here ;)   We all know that Delaware is the usual state to incorporate or establish the LLC for tax purposes, but I have also been told for real estate investing it's best to LLC in your own state or state you'll be investing. All advice welcome!!!! Thanks in advance.

Christine Johanns · Answer

Thanks guys!!!!!! So, I was right to go with my gut.  My state -NJ :)

David Weintraub · Answer

You should deal with your own state, but there's an argument that Nevada has the best LLC protections for reall estate investors.

I can't say whether that's true, but I hear it A LOT.

Basit Siddiqi · Answer

@Christine Johannsin Real estate - It is generally advised to create an LLC in the state that your property will be located in. This will decrease the overall amount fees.There are several fees for setting up an LLC.1) LLC Application Fees2) LLC Annual Fees(Varies by state)3) Fees paid to website/Attorney to set up LLC4) Fees paid to registered agent if you do not have a contact in the state.ExampleIf you purchased a property in Pennsylvania and created an LLC in Pennsylvania - you would have to pay the above 4 fees.

Example 2If you purchased a property in Pennsylvania and created an LLC in New Jersey - you would have to pay the above 4 fees to Pennsylvania and fees 1-3 to New Jersey since you would need to register the NJ LLC as a foreign LLC eligible to do business in NJ.