LLCs for Rental Properties & Bulletproof Asset Protection
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- Опубликовано: 5 июл 2024
- Most investors assume LLCs for rental properties are the way to go in terms of asset protection. From a novice’s point of view, LLCs seem to provide everything you would need-anonymity, simple tax filing statuses, and legal protection. But, an LLC in reality isn’t as airtight as most real estate investors think. And the worst time to learn about the limitations of an LLC is during a lawsuit, where your wealth (and sanity) is at risk.
To stop you from guessing when it comes to asset protection, we’ve brought on our go-to expert and heavy hitter asset protection lawyer, Brian T. Bradley, Esq. Not only is Brian well versed in the realm of asset protection, but he’s also helped numerous clients protect their real estate wealth, making him the perfect person to ask about LLCs, limited partnerships, trusts, and more.
Brian walks through the different types of legal “layering” that real estate investors can set up to protect themselves from lawsuits and angry creditors. He defines exactly how each type of real estate investor should set up their assets as their net worth expands, and what to do BEFORE you get served with a lawsuit. While Brian may not know your personal situation, he does speak with years of experience serving high-net-worth investor clients and can relay their mistakes (so you don’t make them too).
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Join BiggerPockets for FREE:
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Connect with Brian on BiggerPockets:
www.biggerpockets.com/users/b...
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Check Out Brian’s Past Episodes on The Real Estate Rookie Channel:
Episode 105: www.biggerpockets.com/blog/ro...
Episode 106: www.biggerpockets.com/blog/ro...
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Learn More About Asset Protection or Schedule a Consultation with Brian:
btblegal.com/
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Shoot Brian an Email to Connect:
brian@btblegal.com
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Grab David’s Book “Long-Distance Real Estate Investing”:
store.biggerpockets.com/produ...
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Anonymity & Asset Protection for Dummies:
www.biggerpockets.com/blog/an...
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Do Landlords Need an LLC for Rental Property?
www.biggerpockets.com/blog/pu...
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Connect with Rob (Roubilt) on RUclips, Instagram, and Tiktok:
RUclips: / robuilt
Instagram: / robuilt
TikTok: / robuilto
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Connect with David and Rob on BiggerPockets:
David: www.biggerpockets.com/users/d...
Rob: www.biggerpockets.com/users/r...
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Follow David on Instagram:
@davidgreene24 or / davidgreene24
Episode 598
Show notes at: www.biggerpockets.com/blog/re...
00:00 Intro
05:10 Quick Tip
06:37 What is Asset Protection?
11:37 How Safe Are LLCs?
21:08 Using a Limited Partnership
25:19 How Legal Entities Protect Your Wealth
29:22 The Bulletproof Trust for Real Estate Investor
49:02 What if Someone Personally Sues You?
51:05 Financing When Your Properties are Protected
53:56 Cryptocurrency and Virtual Real Estate Protection
57:51 Fire Round
01:04:19 Connect with Brian!
#biggerpockets #realestatepodcast #ep598
I didnt know Dave portnoy knows so much about asset protection.
I can't wait till I'm in a place where I need to hire this guy to build out my trust.
This is so good. I have been learning the past 2 months about RE investing and am getting more and more excited about this adventure. Podcasts/videos like this give me the knowledge and the confidence to start reaching out and getting things started. It's so overwhelming at first and you want to just start rolling but you also need to have direction. Really appreciate you guys and your willingness to share this life changing knowledge. Much love!
This was an amazing episode. WOW! Thank you! I think this was the best, most informative episode of all.
Episode was a GEM and came at the right time. Thanks guys 🙏
Thanks for watching, contact the number above I’ve something big for you⏏️
Just saved this video to my Real Estate folder! Thank you Brian, et al. :)
A lot of useful info in this video. Thank you guys for taking the time to explain all this 👍
Answered the questions I didn’t ever think I would have
One of your best shows!
I don't the last time I've learned so much in an hour.
Great video
As a fellow attorney, it is amazing to me that people are not demanding that he wear a suit tie while giving this discussion. Personally, I enjoy that the attorney on here looks more relaxed. But I have had many negative comments about my page when I was not wearing a suit and tie or even having one book on my shelf that was leaned over as opposed to sitting up straight. Some people just have some weird expectations of what they expect attorneys to be like.
True. Same with investors. Suit, tie, and pull up in the nicest car.
I have this personal stigma about suit and ties. They’re either trying to sell you something or put you in jail. Sometimes losing the suit is good
I agree with you 100%. We are losing class and professionalism. I think professionals should look professional. At least people like Grant Cardone wear a button up shirt.
@@DanielSmith-us3dz pretty judgmental. Some folks like looking good
I'd lose him if he WERE wearing a suit and tie while sitting in his dining room....if he showed up like this to court, that might not be the best look - but anything else, you better have at least lost the tie
This is amazing!!! So important!!
This episode is absolute gold.
It is, but I don't even know what kind of company to work with on something like this. My fear is I'll spend 30k just to sleep better at night, and still not know if I'm actually properly protecting myself lol
Wish I saw this video 20 years ago! Two rentals almost paid off completely, sole proprietor, commingling funds, management company does one 1099 combining both properties. Is there even a point trying to separate myself or the properties for that matter, I definitely pierced the veil. Obviously moving forward I’ll start with an LLC.
So many videos on buying and doing deals but very few on the groundwork that needs to be done before. Thank you for this! Now I just need to find a video on what to do after you’ve already done everything the wrong way.
nice episode
should bring him to the podcast as often as u can
This episode is amazing
Amazing show
I wish he’d cover Series LLCs. Apparently they were created specifically for real estate. My lawyer talked me into one, but I hear other lawyers say investors should have each property in a separate LLC because there isn’t enough cases to refer to on if a Series LLC will hold up in court. I’d love to know more from his perspective. Obviously he’s for separate LLCs, but what does he think about the Series LLC?
Here I am! New years eve learning! Great information and I cannot wait until I'm big enough to need an offshore bridge trust! 11 units in 2 years! Thank you bigger pockets!
This is amazing info I live in New Zealand and am actually 1/4 cook island by blood and was looking to set up a trust before buying my first investment property I never knew a foreign trust in the cook Islands could be that strong Thank you!
Thanks for watching, contact the number above I’ve something big for you✍️
Right on fellas✊🏻! One question, why do you not have jurisdictional connection to a state that you've acquired a property and set up an LLC? Thanks.
This episode was soooooo good. My favorite part of doing this show is learning from pros like Brian.
Great information as I prepare to start my journey! Something that came to mind, for each LLC would we need a separate bank account?
With the airbnb situation can you have them sign a waiver/release of liability , also with rentals and other kinds of property. Can a personal injury/property damage waiver/release be built into the lease?
This is great.
Excellent
What is your opinion on “Series LLC” to eventually own multiple properties in different states.
Can you skip LLC and go LLp directly with properties in different states ?
Way to go guys!
Great pod! How might someone optimize "ECCC", including tax-efficiency, with regard to a Primary Residence that has some STR or month-to-month rental use as well? It seems that a grantor trust (for privacy and/or protection, depending on type) is preferred.
All trusts definitionally have a grantor, trustee, and beneficiary(ies), and I believe one could be both the grantor and beneficiary in a revocable trust (unless prohibited by state law?). The beneficiary could also be an entity (eg. Family Trust, FLP, etc.). More nuance centers on how to handle the trustee.
If one seeks unilateral control, I suppose one could make the trustee an entity they own, perhaps choosing the AZ LP (which isn't an LLP, btw) or a WY LLC (solid, but slightly inferior per my research)? One would be the GP of the LP, which is unavoidably on record in AZ... but that's the price of balancing ECCC I guess. The LP could be one's holding company for other rental property LLCs... but should it? What might I be overlooking? Thanks!
Trust > parent company > sub-sister companies that hold properties. Second trust for personal assets. Trusts from either Nevada or South Dakota too, as well as either an LLC from Nevada, Delaware, or Wyoming.
He sounds more like a salesman trying to sell expensive "offshore protection" package.
Hey David. How can I get connected with your mortgage team? Looking to do a cash-out refi under my LLC on an investment property in Ohio.
Looking to close on my second rental hopefully super quick on this seller financing dea!!! Wish me luck my other fellow investors pros and noobs.
Thanks for watching, contact the number above I’ve something big for you📬
Regarding LLCs, considering banks/lenders may not allow you to transfer the title to an LLC, or if they find out you transferred it without them knowing, they can call up the balance of your mortgage, how do you put your properties into LLCs for that first layer?
creative financing.
Question I’m buying my neighbors mobile home aka manufactured home in a couple weeks so it needs some rehab anyone know if sellers concession is still an active thing or should just do cash 12k$ year 1995 this will be my first flip so I’m new new just started listening to bp this past winter
sidenote already have a buyer (my brother)
Thank you for your clips, I have a few questions if you can help:
* I live in California, and I have properties in Tennessee, where should I create my LLC?
* Can I create my LLC in one of the following states (Delaware, Nevada, Wyoming) and still holding properties in other states
* Where should I create my holding company?
You CAN, create the LLC in WY how Holding and Put the Tennesse property under this Holding in WY. Do you can talk with Clint Coons ( Anderson Advisers) this Guy understand ALL About the Asset Protection.
This topic should have been covered by a highly experienced real estate investor. Not someone who sells legal services.
I'm just getting started and a huge fan of starting with a plan. I'd rather spend the money upfront so it's easier to scale. Did I understand correctly, that I will need two lawyers? What exactly is a business lawyer? I'll do some research but I just want to understand if I need two lawyers. TIA
Thanks for watching, contact the number above I’ve something big for you📬
If LLP holds all LLC, If no bridge trust, if LLP is under attack, all LLCs are in danger right? Who will be the GP? Many advise useing an LLC as GP.
This video needs a whiteboard or PowerPoint slides
FYI he charges $30,000 to get started.
When you say we will be out of control of our assets, what would be the point? Unless the goal would be to lose ownership until the case goes away and then re-domesticate it to gain ownership again. But what risk would that come with when you lose ownership.
I guess losing ownership temporarily, so as to protect the assets from being taken permanently is the only way to do it.
Do 4 properties even generate $2600 in cash flow to maintain this setup to protect them?! Man…
God lawsuits are so disgusting these days. 11 million because some dip jumped off a patio.
🔥🔥🔥🔥🔥
I am planning on buying a investment property out of state. Should I create a LLC in the state I live or the state the property is in? What are the benefit of having a LLC in the state the property is in?
Thanks for watching, contact the number above I’ve something big for you⏏️
Watch pace morby videos about this.
IMO a person really needs to have a good base understanding of these things. Using professionals is great for ideas and implementing properly. But I see many people hire a professional who implements something not understood. Very messy.
Thanks for watching, contact the number above I’ve something big for you☎️
Comercial lender requested. 5 unit apartment
Cardano is the way to go 🔥
That doesn’t even make sense. I need someone to explain to me how a drunk jumping off a balcony leaves a homeowner liable. Nor can I find the case on google.
Yelp, I did that wrong(LLC/Trust), it with worth changing? I think it just makes people not want more but if they do . YOLO.
🔑
Great info. But $30k for a trust? 😂. I also don’t understand how an LLC being treated as a disregarded entity for tax purposes gives you less protection? I’ve never heard that before and I’ve studied entities over the last 6 months.
When the LLC is acting as an extension of yourself, the court may say “the LLC and the owner is the same”. It’s not very common, but it could happen in court.
@@angelmariogonzalez813 Right but as a single member managed LLC, it's automatically considered a disregarded entity by default. Profit and loss is still reported on Schedule E. Rental real estate isn't actively managed if I simply have a Tennant in there who pays me every month. That's considered passive. If I used it for AirBnb or operated a bed and breakfast, that'd be actively managed so I'd report profit and loss on schedule C. I could also be taxed as a corporation or have LLC taxed as separate entity. But by default, I don't believe we have a choice if rental is passive.
David, I tried to tell you this before but you are distorting and you either need to bring your amp down or put a limiter in line.
No amount of tax planning will prevent Probate....
David, you should be drinking more water anyway. But I would be interested in your team.
The gangster renting and killing and owner being liable just got me f@@@ up 😳
Baskin-Robbins has 31 flavors
What's Dave Portnoy doing on the show?
Dimonds in every minute
.....aaaand how much does it cost to "disconnect" that trust in the doomsday scenario?
I don't get the point about Blockchain based documents in the fire round questions. Is there really a culture where people are forging legal documents and being successful in court? The idea of holding a deed in Blockchain sounds so wonky and unnecessary.
Yeah, get a lot of WhatsApp responses on BP.
⬆️⏏️
Brandon is missed
Go INC or go home.
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