Attorney with properties in different states

[Katie Ann Mangan]

Hello all!

My husband and I currently live and operate an STR house hack in Seattle, WA. We also own a beach property in gulf shores, AL

We are in the process of purchasing our next property in Grand Rapids Michigan and are likely going to be buying several there. We are wanting to move our Alabama condo into an LLC (currently under our personal name as we used the 10% down vacation home loan) and will want to probably start moving our michigan properties into an LLC once we have them.

My question is, does it make more sense to talk to an Alabama attorney or a michigan attorney to get this process started?

Any recommendations for attorneys in those areas would be great as well! Thanks!

[Greg Scott]

You will need to talk to an attorney licensed in the state where you intend to create each LLC. The LLCs could be created in any state of your choosing, not just Michigan or Alabama. If you create an LLC in one state but are doing business in another, some states will require you register these as foreign LLCs in their state and have a registered agent.

[Doug Spence]

@Katie Ann Mangan I would set up an LLC in the same state the properties are located. Are you aware of the due on sale clause? If the mortgage company finds out you moved it to an LLC, they may not be happy about it. Is there a particular reason you want it to be owned by an LLC instead of your personal name

Also, do you self-manage your Gulf Shores property? I have a couple of buddies that do STR management along the Florida gulf coast there.

Good luck!

[Candace Pfab]

Quote from @Katie Ann Mangan:

Hello all!

My husband and I currently live and operate an STR house hack in Seattle, WA. We also own a beach property in gulf shores, AL

We are in the process of purchasing our next property in Grand Rapids Michigan and are likely going to be buying several there. We are wanting to move our Alabama condo into an LLC (currently under our personal name as we used the 10% down vacation home loan) and will want to probably start moving our michigan properties into an LLC once we have them.

My question is, does it make more sense to talk to an Alabama attorney or a michigan attorney to get this process started?

Any recommendations for attorneys in those areas would be great as well! Thanks!

We have an attorney in Orange Beach who has been helping clients set up LLCs for AL properties.  I have always been told that it is best practice to have the LLC in the state where the property is located.  Our contact here might be able to elaborate on that.  There are state specific filings that need to happen & that can get tricky.  Feel free to PM or text me for contact info!

[Dave Skow]

@Katie Ann Mangan- good luck with your plans ...if you have loans in any of these properties - you might inquire with the lenders about the idea ( as some lenders might have an issue ) ...if the plan with obtaining the new places is to do them in LLC name -and you need financing - make sure your lenders are OK with making loans in a LLC name

[Katie Ann Mangan]

thanks everyone, y'all are fast to respond! Yes I am aware of the due on sale and will definitely will inquire with the lender before I do anything. i felt looping in an attorney was a good place to start

@Doug Spence Main plan was to move it for liability purposes but again wanted to just connect with an attorney for best recommendations on how to approach everything first. and yes I do self-manage! it's not too bad!

[Greg Parker]

Also, consider a trust to hold all of the LLC's, for great protection.

[Drew Sygit]

If you're going to start using LLC's, one of the often overlooked benefits is the tenants/guests NOT knowing who you are!

So, make sure you have a registered agent on your LLC paperwork, and don't use your name and home address.

In Michigan, you can look up the Sharp Law Firm and Stateside APM to set up your LLC's, both will also operate as your registered agent for an annual fee.

[Kirsten M.]

@Katie Ann Mangan - Hi Katie! You've gotten a lot of great responses. I wanted to add that I worked with a firm who services each state and can help you deal with the due on sale clause if/when you move your rental into an LLC. I'lll send you a message.