Sole proprietor with insurance or LLC living in California

[David Almilli]

I'm just starting out investing rental properties out of state and I keep going back and forth on whether to structure it with a sole proprietor with umbrella insurance or starting an LLC in the state I plan to buy properties in. I live in California so I know that if I start an LLC that it means an $800 annual fee even if the LLC is in another state. At the same time I also watched Brandon Turner's video about the topic which made me think that it might be enough to just get insurance to cover any lawsuits. I own my own home and have one rental property in San Diego. If I end up buying many units over time it might make more sense to have 1 or more LLCs. What are your thoughts on it?

David