Is an LLC best strategy for out of state investing

[Doug Dattawalker]

Hi all, What are the costs/benefits of setting up and using an LLC to manage out of state investment properties. I am looking at doing a 1031 exchange on a property in CA for a 4+ apartment building out of state and wondering if it is cheaper/safer/ better to use an LLC? Thanks in advance!

[Melinda Warren]

Hi Doug,

Congratulations on protecting your profits and trading into a multi-family apartment! I'm also in CA and completed a 1031 exchange for a commercial property out of state last year. I wanted to be very careful about making this move and not leaving anything to chance. After listening to a podcast with Aaron Young of Laughlin Associates it became clear that there are many risks involved if you don't utilize an LLC and for me the benefits far outweighed the cost. Take a listen to the podcast (it was The Best Ever Podcast w/ Joe Fairless) and see if that helps clarify the pros/cons for you. Personally, the managed approach they provide gave me huge piece of mind and I've continued to use individual LLCs for all of my investement properties since. Good luck!

Melinda