Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
Do I need to setup an LLC with the state that the property is in? For example the property being purchased is in Kansas; do I have to get a Kansas LLC? Thank you.
Investor · Shakopee, MN · Member since 2017 · 102 posts · 60 votes
9y
Definitely talk to any attorney for legal advice. Not advice but it really depends. Some people form LLCs in different states depending on what protections they need, but that may require registering as a foreign entity in the state where the property is. It depends on state requirements. (Like I've heard of people getting NV and DE LLCs to own their CA real properties, but then the LLC still needs to register with the CA Secretary of State as a foreign entity.)
Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
9y
I would check with an atty like others have said - but in researching properties Ive seen more than my fair share that were titled to an out of state LLC.
If you do it that way it makes it very difficult to track down the owners - KS has this little gem to look up KS based entities.
Rental Property Investor · Broken Arrow, OK · Member since 2016 · 1k+ posts · 1k+ votes
9y
Seek an attorney's advice, I'm not one.
From my experience, an LLC or individual can own real estate in any state, there's no need in forming another LLC in that state, unless you're going to be doing business within that state. All my properties in multiple states are all owned by the same LLC. Owning real estate is not considered doing business, you don't even have to get your LLC approved to do business in that state to own/buy real estate.
If its a buy and hold situation, and you're going to manage it yourself, your original LLC could still own the property, and you could form a separate LLC in that state that's your property management company to do business. If you're hiring a property manager, you wouldn't need to do that.
Some people put all their properties in separate LLC's. Depends on your approach and exposure to liability. All of my properties are held in one LLC Holding Co., but I also keep good insurance on every property, and have 100% equity in all my properties.
Investor · Shakopee, MN · Member since 2017 · 102 posts · 60 votes
9y
Definitely talk to any attorney for legal advice. Not advice but it really depends. Some people form LLCs in different states depending on what protections they need, but that may require registering as a foreign entity in the state where the property is. It depends on state requirements. (Like I've heard of people getting NV and DE LLCs to own their CA real properties, but then the LLC still needs to register with the CA Secretary of State as a foreign entity.)
Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
9y
thanks for the advice everybody! @Jeff Filali This would be a buy and hold property. I live in Seattle, and I would have a property manager. I intend to have one LLC own all my properties (including my Washington state properties). The way I would structure it is have the LLC own each land trust. Each land trust would hold title to each of my properties. So my question is: the state of the LLC doesn't matter then?
Investor · Wichita, KS · Member since 2015 · 769 posts · 279 votes
9y
Originally posted by @Account Closed:
@Shane H. It is not hard to tie the owner to the property to the LLC and good due diligence will lead you to the front door of the owner with the property.
I understand that - just pointing out finding owners of businesses registered in KS if fairly easy - I have not needed to track down owners of a business in other states so not sure how each state works and if regulation of business entities is different from state to state like insurance regulations....well you get the picture. Ha
thanks for the advice everybody! @Jeff Filali This would be a buy and hold property. I live in Seattle, and I would have a property manager. I intend to have one LLC own all my properties (including my Washington state properties). The way I would structure it is have the LLC own each land trust. Each land trust would hold title to each of my properties. So my question is: the state of the LLC doesn't matter then?
Hi Gulliver--
Curious what you ended up finding here. We are Connecticut residents planning to buy and hold a rental property in Indiana, hiring a local property manager there etc. Does it make sense to set up the LLC under the state of Indiana - or does it even matter? Appreciate any advice!
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
6y
@Gulliver R. - why do you think you need an LLC? Are you buying a large appartment building? Do some research on pro's and con's of LLC's before you decide you need one. Great video from Brandon Turner on YouTube.
Investor · Seymour, IN · Member since 2016 · 165 posts · 32 votes
6y
Consider that an LLC adds more protection than an individual. Ex: 3 houses in my name are rented and a fire occurs in one. Family sues, then everything in my name is at risk to settle the law suit... and it is considerably more than my insurance. An LLC can hold title and it is better, but what if each house is in its own land trust and the LLC is the trustee of the trust. It is a lot better than attaching everything to you.
Specialist · Member since 2019 · 137 posts · 125 votes
6y
No, it does not have to match the state of the property but the type of LLC or instrument should factor into which state you reside for structuring and tax purposes.
Investors who live or invest in California have franchise tax considerations they must be aware of that they can avoid with the right structures. Same with Massachusetts & Delaware.