Forming an LLC out-of-state or in the state you plan to invest

[Kyler Lopez]

I'm a new investor and I live in New York. I haven't purchased a property yet but I'm looking to invest in multi-family residences around the Springfield Massachusetts area using the BRRRR method. I need to form an LLC for my first purchase, but I'm not sure whether I should register my company in-state or out-of-state. What are the pros and cons to forming an LLC in the state you plan to invest in? Does it matter where my LLC is formed?

Any input is appreciated, thanks!

[Chris Mills]

Your attorney will be better able to address the specifics, but I've always been advised to form the LLC in the state I was investing in, though I don't think there's any restrictions to investing in MA with a NY LLC. I've been investing out of state for a while, and there may be some difference state by state. I usually invest in business-friendly states, not sure if that makes a difference.