Investor · San Diego · Member since 2019 · 39 posts · 16 votes
Hi everyone! newbie investor here with few properties in my portfolio. As my portfolio grows I am strating to think about all possible ways to protect my assets and myself from all liabilities.
I have properties that have conventional mortgage, prroperties financed and with partner (this one is under LLC) , properties under my personal name (paid cash), properties with seller financing (under my personal name)
I am thinking what is the best way to protect myself and my assets in all scenarios? and is there anything you can recomend for me moving forward? should I contact a real estate attorney and discuss this with him/her?
Attorney · NY · Member since 2022 · 59 posts · 77 votes
3y
If you are a CA resident, then I would recommend looking into a Delaware Statutory Trust (DST). It has a parent-child structure to separate assets into secure series, similar to a Series LLC, extending liability protections to real estate investments within the structure.
It's generally best to have each major asset inside its own company. So if you own, say, five properties, you will have your parent DST as well as five series beneath it.The ability to shelter assets inside of individual Series offers investors a high degree of protection.
Additionally, DSTs don’t have to pay the $800 annual Franchise Tax owed by LLCs and Series LLCs.
Real Estate Agent · Miramar Beach, FL · Member since 2016 · 285 posts · 245 votes
3y
@Marija Petrovic It sounds like you're a serious investor and have plans to grow your portfolio in the future. With that said, I think now could be a good time for you to connect to a good RE attorney who can help you strategize protection of your portfolio. As an investor, it's a matter of time until you'll probably need an attorney, so why not establish the relationship now. The benefit of having a great attorney on your side will far outweigh the cost.
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
3y
I would suggest you invest some time watching carefully the hours of information available on the Clint Coons Youtube channel.
While there are different levels of structuring you can do for asset protection, and after having studying this field for over ten years now, this is the best comprehensive resource I have found on the net.
There are some more extreme asset protection techniques with offshore entities and trust that are not really discussed in this channel, but these are often not very useful for real estate asset as a local judge in the jurisdiction where the real estate asset is located can completely ignore the offshore part and seize the local asset. It is great however for cash, brokerage account, or foreign assets.
Attorney · NY · Member since 2022 · 59 posts · 77 votes
3y
If you are a CA resident, then I would recommend looking into a Delaware Statutory Trust (DST). It has a parent-child structure to separate assets into secure series, similar to a Series LLC, extending liability protections to real estate investments within the structure.
It's generally best to have each major asset inside its own company. So if you own, say, five properties, you will have your parent DST as well as five series beneath it.The ability to shelter assets inside of individual Series offers investors a high degree of protection.
Additionally, DSTs don’t have to pay the $800 annual Franchise Tax owed by LLCs and Series LLCs.
I would suggest you invest some time watching carefully the hours of information available on the Clint Coons Youtube channel.
While there are different levels of structuring you can do for asset protection, and after having studying this field for over ten years now, this is the best comprehensive resource I have found on the net.
There are some more extreme asset protection techniques with offshore entities and trust that are not really discussed in this channel, but these are often not very useful for real estate asset as a local judge in the jurisdiction where the real estate asset is located can completely ignore the offshore part and seize the local asset. It is great however for cash, brokerage account, or foreign assets.