LLC Formation for a Californian Investing Out of State

[Michael Modesto]

Hi all.

I'd like to get your thoughts on forming an LLC, from folks who have done this before.

After review, I've determined that I want to set up an entity to hold my investment properties to add a layer of protection for my other non-REI assets. Adding a layer of privacy as well, is of high value to me.

I live in California but invest only in out of state properties.  I currently have 1, am in the process of scaling that up to 6-10 over the next 12 months.

My questions:

- Is it advisable to form an LLC in California (with its high fees), or somewhere else, say in Nevada?

- The answer to the first question would affect this because of costs/fees... but when should I form the LLC? My instict is to do it now, before buying the 2nd property... but should I wait until I have 3? 5?

Thanks.

M

[Ali Boone]

Hi Michael. I wrote an article on this that may be helpful. 

http://www.biggerpockets.com/renewsblog/2013/08/17...

It mentions CA specifically in there as well. Main point with that is, even if you set up the LLC elsewhere, you will still have to pay CA fees, according to my research and experts.

Hope that helps!

Where do you buy?