Originally posted by @Thomas C Veatch:
I'm an out-of-state investor from Seattle and my Pennsylvania lawyer did agree that my apartment purchase should be done inside of an LLC, but she didn't really care if I had a Washington state LLC doing business in Pennsylvania as a foreign entity versus a Pennsylvania LLC. State fees for LLC and entity maintenance are I think the main factor. For example once I had a California entity and it was 800 a year plus a state tax return which, really, you don't want to have to deal with that every April. Later when I moved to Washington the annual fee for an LLC, I found, was much smaller, like $70 or so. I should have shut down that California entity immediately because it was based there originally but no longer doing business there but ended up spending a lot of money on California entity fees. There are LLC registration jurisdictions like Nevada and Delaware etc. where it's not expensive or difficult to keep up with the paperwork to maintain the dang thing, but don't think you're getting away with anything because it's really a shell game: when you go to a different state to do business like to own a rental real estate investment there then you have to pay the local jurisdiction their foreign entity fee which is identical to the local registration fee for an entity which is exclusively registered in that locality. So I'm paying Pennsylvania's registration fee whether it's a Pennsylvania LLC or a foreign entity. In my case Washington state has no income tax on an individual person so an LLC is also not taxed at the state level because single owner LLC income is personal income. So there's no tax burden to having an entity in my home state to own properties wherever. And a little bit of flexibility for the future, in case my "empire" grows to be across different states. In any case I am required to register my Washington entity as a foreign entity doing business in Pennsylvania and also to have a Pennsylvania address for local service of process and that's my lawyer's address which costs a nominal fee every year.
If my home state had a high cost of registering there then I would just have my LLC be domiciled in Pennsylvania.
But I’m a plumber not a lawyer so your mileage is your own. So to speak
Did you purchase all cash or get a mortgage? I tried to close one of my properties in my LLC. The lender would to close the mortgage in my name, but put the LLC on the deed because the lender wanted a personal guarantor for the mortgage. The Title Company said this could not be done because of State Law. They said the deed and mortgage had to match. How were you able to do this?
I reside in NY, but have a Pennsylvania LLC. But if I am unable to close the property in the LLC, it makes no sense to keep it open.
