Establishing an LLC for OOS Investment Properties

[Kristen L Garner]

Hi everyone. I'm a resident of Los Angeles, CA and I plan on purchasing rental property in Indiana. Where is the best place for me to establish an LLC? I have read about creating a LLC in the state I plan to do business in (Indiana) versus my state of residence (California). I have also read that Nevada and Delaware (specifically the Delaware Statutory Trust) have advantages especially for Californians, but I'm not sure if these apply to out of state rental properties? Any help would be greatly appreciated!

[Ric Ernst]

@Kristen L Garner an umbrella insurance policy is an additional policy that gives you added liability protection above and beyond what your home or auto policy provides. Assuming you are a high earner and own a house of your own in LA and if, hypothetically, you have a rental house with $500,000 liability protection and your tenant were to suffer an injury or worse, they could go after you personally (especially if you have assets worth more than that $500k insurance) and sue you for the value of your personal assets. By the way, they could potentially still do this if your property was in an LLC. Your umbrella policy would cover that and leave your personal assets intact.