You likely want to create the LLC in the state where you will be considered to be doing business(the state where the property is located in).If you want to sue a tenant or third party, the court will only recognize the LLC if it is registered within the state.You have the option of creating an LLC in your state of residency.

I recognize with 1031 you may have some hard time constraints, but avoid being reckless.   

That would pay for your education in just over seven months, and probably save you ten or more times that by knowing how to avoid newbie mistakes.Then, when you go to REIAs and other investor groups you'll be equipped to recognize who is doing it right and who is attending the School of Hard Knocks (most expensive education there is).My $0.02 ...

From social media to partnerships with recognized travel platforms, our strategy focuses on highlighting the unique aspects of the property.

However, part of what I was trying to convey was that there are a lot more tires than you will recognize as worth kicking or even see. 

., RI doesn't recognize capital gains and considers it ordinary income), being mostly business unfriendly, and no real engines of economic growth.It has been doing "generally OK" over the last couple of years but my impression from researching other areas of the country is that other parts of the country are doing MUCH better and currently have much better longer-term prospects.My standard advice to anyone is that if you're already in RI for some other reason, it's certainly possible with some hard work to eke out an OK real estate investing return, but if you have any choice at all I strongly urge you to research other, higher-economic-growth and more-business-friendly, parts of the country. 

There are lots of expensive mistakes that can be made (collapsed sewer pipes may not be easily recognized without a scope, and can cost $20k in Cincinnati to replace) But, I can make on one flip what takes me 5+ years to net in rent.  

I recognize your question was about financing, but this response makes me feel like I have to say something about expenses. 

So if you form a DE or WY LLC you will pay registered agent fees ($250 - $600 per year), franchise tax in that state (at least $100 per year) plus any other obligations imposed by the state of Domicile.PLUS You will need to pay a registered agent in Illinois and file an IL tax return as a foreign entity (Not domiciled in Illinois) Even if you do not make a profit.Liability - IL Courts will not recognize the privacy or protection you hope to get by setting up in another state.

Perhaps in the residential space, enough people colloquially recognize HML as "cash"?