Forming an LLC - Memphis Investor Living Out-of-State

[Phil Petite]

Hi BP! :)

General question here: I invest in long term rentals in Memphis, but I live out-of-state in NYC, so I was wondering if anyone had any general advice about starting an LLC in my situation.

Would you form the LLC in Tennessee or would you recommend forming the LLC elsewhere? Any advice would be great, thank you in advance! :)

[Scott Gresham]

Hey Phil,

I live here in Memphis and can say from experience that Tennessee makes it easy to setup an Llc.  Doesn't mean its a necessity to have it formed here but it is a fairly straight-forward process.  If you have any specific questions I'd be happy to connect with my attorney for advice.  All the best and let me know if I can help in anyway.

[Jordan Ray]

Quote from @Phil Petite:

Hi BP! :)

General question here: I invest in long term rentals in Memphis, but I live out-of-state in NYC, so I was wondering if anyone had any general advice about starting an LLC in my situation.

Would you form the LLC in Tennessee or would you recommend forming the LLC elsewhere? Any advice would be great, thank you in advance! :)

Hey Phil! Do you still have the video I shared with you months ago on how to set up an LLC in Tennessee? Check our chat messages, should still be there. I wouldn't recommend setting up an LLC out of state if you are buying in Tennessee unless your tax advisor is looking to help you on strategy.. but from a numbers standpoint, it really doesn't make sense when you start adding up on all of the annual LLC reporting fees from different states and then it starts cutting into your cashflow. Hope that helps!

[Phil Petite]

Quote from @Scott Gresham:

Hey Phil,

I live here in Memphis and can say from experience that Tennessee makes it easy to setup an Llc.  Doesn't mean its a necessity to have it formed here but it is a fairly straight-forward process.  If you have any specific questions I'd be happy to connect with my attorney for advice.  All the best and let me know if I can help in anyway.

Thank you for the reply, Scott! :)

I spoke to my attorney (From NYC), and he suggested forming the LLC in TN. So, I will set it up that way; he suggested this, because if there are disputes between me and the tenant, then they are more easily resolvable if the entity is in TN.

[Phil Petite]

Quote from @Jordan Ray:

Quote from @Phil Petite:

Hi BP! :)

General question here: I invest in long term rentals in Memphis, but I live out-of-state in NYC, so I was wondering if anyone had any general advice about starting an LLC in my situation.

Would you form the LLC in Tennessee or would you recommend forming the LLC elsewhere? Any advice would be great, thank you in advance! :)

Hey Phil! Do you still have the video I shared with you months ago on how to set up an LLC in Tennessee? Check our chat messages, should still be there. I wouldn't recommend setting up an LLC out of state if you are buying in Tennessee unless your tax advisor is looking to help you on strategy.. but from a numbers standpoint, it really doesn't make sense when you start adding up on all of the annual LLC reporting fees from different states and then it starts cutting into your cashflow. Hope that helps!

I forgot about that video, thank you so much, Jordan!! I'll use it for sure to set up the LLC :)

You're right about the annual fees, etc. and I think TN is the best place to set this up.  :)

[Ashish Acharya]

@Phil Petite Forming an LLC in Tennessee is recommended if your rental properties are located there, as it simplifies legal compliance, avoids the need to register as a foreign LLC, and aligns the LLC with Tennessee's laws for property management and tenant disputes. This approach is cost-efficient and eliminates the complexities of dual-state filings. If you plan to invest in multiple states or require advanced asset protection, consult a CPA or attorney to explore options like a holding company structure. For most single-state investors, a local LLC is the practical choice. Remember you are exempt from excise franchise tax if you file an exempt form.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.