Where to set up LLC for out of state investing

[Jeff Caravalho]

Hi BP, I'm looking into out of state investing, but am being told I need to have a California LLC to do that (I Live in Sacramento). However, I'm talking to a turnkey company in Ohio who says all I need is an Ohio LLC (much cheaper). My question is:

Where do I need to set up my LLC. Tax person says "By the very act of choosing this company while residing in California, you are exercising management which is defined as doing business within the state". Is he saying as long as I don't use a professional management company, I'm ok? But then what about collecting rent, isn't that business? I know someone who has moved 4 times without selling, so he has 4 houses in 4 different states. He has no LLC. I was thinking of getting just one house, near relatives, and manage through them...for now. If it goes ok, I can set up LLC and go bigger. What do you think? Thx.