Creating an LLC: state where properties are located

[Tanya Maslach]

Hi all

Some context:

We have 1 LTR in Denver now, and reside there. We do NOT have a separate LLC for it. Taxes/Expense: flow through our personal taxes.

Questions:
a. We are about to buy properties in OH. Should we set up a simple LLC in Ohio? Or does it matter (can we create one in Colorado)?

b. What are cost and time effort for setting up an LLC for REI purposes? Curious to learn options for ease of set up and $ hard costs (Think about it like Tier 1, Tier 2, Tier 3, with Tier 1 being "just fine, it works" and Tier 3 being "Pro-Level with Pro Prices")

Thank you!  HAPPY THANKSGIVING!
Tanya

[Patrick Drury]

@Tanya Maslach
There is a bunch of forums already discussing whether to us an LLC or not to buy a property. As someone who lives in Columbus and invests here locally, I would just buy it in your name. The cons outweigh the pros of getting an LLC for 1 single family. You'll just be paying for a higher interest rate which will hurt your numbers and cash flow and you'll be paying more to maintain the LLC.


In terms of Costs associated with an LLC
-Roughly like $100 to file with the secretary of state in Ohio if you wanted to do it yourself
-Cost for your accountant to prep a tax return at the end of the year for that LLC (depends on your accountant)
-Cost of a higher interest rate with a DSCR loan
-Maybe more advanced, but if you have more rentals the cost of additional bookkeeping software like having to pay for additional quick books accounts. In my case, thats is like $99 a month for quick books plus.