Would it be in my best interest to register as a foreign LLC in Texas? 

You can register your LLC in any state, but in order to do business in your home state, you will have to register as a foreign entity with the division of corporation in IL.

Hello.I have a foreign friend who is interested in invest in rental property, but there is one concern that he has to pay 30% withholding tax.

., there are few lenders In the US that could lend to foreigner buyer like yourself, but you will probably need 30%-40% deposit. so you do need some cash to invest in the US. 

Foreign investor parking cash I believe.

So, if you create an LLC in another state, you will likely need to register it as a foreign LLC in California.

Someone suggests me to check out the Northwood neighbourhood, where foreign buyers especially those from Asian have been purchasing.

In most cases you are going to have to have to file the state LLC paperwork and in the other state file the LLC as a registered foreign corporation.  

. (~$75/yr)   Also, you may have to register your LLC as a foreign corporation.  (~$50/yr)   From that perspective, putting all properties from one state into the same LLC would minimize your administrative burden and fees.  

You see, the tax code has incentives in place to reduce our reliance on foreign oil, and that means these investments come with some fantastic tax advantages.