Al Aiello-LLC Master Machine??

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Al Aiello-LLC Master Machine??

Brady Hanna
Investor · Shawnee Mission, KS · Member since 2013 · 82 posts · 12 votes

Has anyone bought this "LLC Master Machine" course from Al Aiello? The cost is $695. I listened to a podcast on this and it sounds interesting, but I hate to blow $700 if it isn't worth it. My wife and I are at the starting phase of forming our LLC right now. If any of this would truly be a benefit for establishing our company, I am not against dropping the money for it, but if it gives you the same protection that just a CPA setting up your LLC will provide, I can save some $.

Here are their claims:

• Give you ironclad protection of your personal valuables

• Give you the ability to save substantial amounts of taxes

every year

• Give you the power to defend yourself against IRS attacks

• Prevent legal disputes and save you $1,000’s in legal fees

• Enable you to successfully operate your real estate business

The Real Estate Operating Agreement Extraordinaire

The operating agreement (OA) is the nuclear LLC document. It is the "heart & soul" of the LLC. The OA extraordinaire is the most powerful OA ever. Adaptable in all 50 states, it is specifically designed for your real estate so that your LLC will give you optimum legal protection and maximum tax savings

Operating Agreement Extraordinaire (121 page Blank format w/ table of contents to review) which blows everyone's mind! (Blank format with instructions for completion).

PREVENT PIECING OF THE LLC VEIL WITH MINUTES OF MEETINGS AND RESOLUTIONS – One of the most vital of entity formalities to prevent piercing of the veil, all specially targeted for real estate operations; filled-in and ready to go. You can use these without physical in-person meetings.

FREE IRS Set-Up: Step-by-step instructions to easily, quickly and correctly complete IRS Form SS-4 for federal ID and Form 8832 for the proper LLC tax classification to audit-proof your tax returns and more. Includes blank and sample filled-in formats

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Pat Marco
Real Estate Attorney · Manhattan, NY · Member since 2014 · 129 posts · 106 votes
12y

I agree with Jerry W but please understand that you do not ever structure asset protection with "fake loans". What I wrote above is after you get insurance You set up a separate WY LLC (Wy is best for this) and capitalize it by owing money to it (it is all in the proper drafting of the Operating Agreement)

The money you owe to it is then drafted as promissory notes and liens get recorded against each of your assets stripping any and all equity .

I have used this technique for years and have known very few attorneys that are actually familiar with how to properly set up these structures. Usually it is set up for the wealthy. (Trump does not use anonymous C corps - he has TRUMP in big letters on his buildings because my understanding is his attorneys use this very same technique)

So the liens that strip the equity in your properties are not fake loans, they are created to truly capitalize a legal entity, hence the "economic reason" that holds up in court.

Look it up on line and you will see there has not been one federal case challenging such an arrangement provided your liens were recorded "prior to" any lawsuit being initiated or filed against you.

This structure saved an acquaintance of mine millions in a lawsuit on an apartment building in Chicago, where the litigants tenants wanted to slap him with punitive damages in the millions, but could not because there were no equity and if they would've won and gotten a charging order they (the plaintiffs) would've been stuck with a phantom income tax bill based on IRC 77-137

Pursuant to Revenue Ruling 77-137, the IRS requires the judgment creditor in possession of a charging order to pay tax even though income was never distributed!

There you have it... The Ultimate Asset Protection for the least amount of money because all you have to pay for on a yearly basis to protect all your assets is the renewal fees for you WY LLC with the resident agent and that costs a few hundreds a year (which is less than I pay in yearly insurance on one of my smallest properties) therefore seminar gurus can't afford to sell this best structure and instead resolve to separating assets in multiple LLCs, anonymous C Corporations and complicated trust accounts etc

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  • James Vermillion
    Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
    13y

    Brady, I am not sure about the program but a lot of the information about setting up an entity can be found right here on BP and by talking to a CPA, which you will likely need to do anyways. Between a CPA, attorney and previously compiled information, I do not see a need for such a program. Hopefully, someone else who knows more about the program will chime in.

    4Reply
  • Bryan H.
    Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
    13y

    Start with free resources, then if you can't do it find a local attorney/cpa to help you. It will be cheaper than a guru program.

    http://www.kansas.gov/businesscenter/
    http://www.kssos.org/business/

    1Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    13y

    Yes I have an earlier version of his stuff. Yes I found it useful. Is it the end all and be all of what you need to know - No. Another course to consider is John Hyer's "The Real Estate Investors KISS Guide to Entities." John Hyer is both a CPA and an attorney so you get the perspective from both sides. This is important because what you attorney advises may be very different from what you CPA advises because they are considering different issues.

    John Hyers choice of entities article

    Originally posted by Brady Hanna:
    My wife and I are at the starting phase of forming our LLC right now.

    Given that you are new I suggest you get some of the books by NOLO Press. I also have at least two of their books. One is "Form Your Own Limited Liability Company." I am not necessarily suggesting you form your own LLC but it will give you the knowledge to speak more intelligently with your professional.

    By the way you do not go to a CPA to form your LLC. That is legal work and needs to be done by an attorney not a CPA. Your CPA can however give you advice on how to structure it regarding taxes.


    An LLC does not give near as much protection as some people think. One very good reason for buying these books and courses it to learn some of the limits of an LLC. If you do not know the proper formalities of running an LLC you could find that it offers no protection at all.

    Good luck - Ned

    5Reply
  • Account Closed
    New York City, NY · Member since 2013 · 1 post · 3 votes
    13y

    I invested in Al Aiello's Master Machine and expected to receive a bunch of forms that I'd simply fill out, add my own special touches and file with the state.

    What I received was at least 80 pages of "information" (with numerous links) which amounted to my getting a Phd in Accounting and Business if I read it all, plus hours and hours of audio recordings (more "information") and a "quick and concise" 70+ minute video, also "teaching me" and giving me "information".

    In my mind, "What's the point?" I thought I'd have the work all done for me, since he advertises that he's invested "hundreds of hours" of "time and experience" for me, and in the end it's a tedious, scary, gigantic, months long process to read through all his material, his links, listen to his audios, watch his videos and then figure it out yourself based on this wonderful info. I have no time for that.

    To his credit, I applied for the refund (within his 30 day limit and in accordance with his rules) and he did refund my money. For those of you who think you'll order all this stuff, apply for the refund and take your time reading it and thereby rip him off and get the benefit of his work. Good luck with that.

    Get a CPA and an attorney, both of which specialize in the field you're in (i.e Commercial Real Estate attorney, or Banking attorney and CPA qualified and experienced in those types of filings) and have the two of them hammer out an air tight LLC for you. And make sure one of them files your meeting minutes on a regular basis to avoid piercing the veil. A simple fill-in-the-blank form you can make yourself on a word document where you hand write date, time, members present, resolutions ---write "none"---and save it all in a nice binder and you're safe (but I'm not an attorney so don't take legal advice from me).

    I don't recommend his Master Machine. I'm sure it's awesome, but if he's not actually doing the paperwork for you, it's not worth it, IMHO.

    Good luck!

    4Reply
  • Tom Sylvester
    Real Estate Investor · Rochester, NY · Member since 2008 · 193 posts · 46 votes
    13y

    I have not checked out the course but I agree with the others comments on here. The information regarding creating an LLC is available here on BiggerPockets and on many other websites, so I don't see the need to spend money on a course for it. Also, the NOLO books that @Ned Carey recommended would also be my first recommendation.

    1Reply
  • David Beard
    Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
    13y

    That happens to be the one and only RE course I have ever purchased (earlier this year at a Mr. Landlord conference), and I haven't even looked at it at this point. He did write all the material along with a very experienced RE/tax attorney, so both professional perspectives are represented. The sales pitch I listened to of course pressed several "fear" buttons, so I thought getting some additional guidance/tips couldn't hurt. He does seem pretty sharp in person. They were offering 6 months of unlimited email support directly from Al (damn, I've already wasted most of this, LOL). There is supposed to be lots and lots of tax tips as well.

    I appreciate the fact that there is lots of "meat", per the comment above. I can buy a book from NOLO for $20 if I just want something that is fill-in-the-blank. ( I did in fact buy the NOLO book, and the operating agreement in there is woefully inadequate compared to what my attorney eventually prepared.)

    1Reply
  • Bill Ham
    Commercial Landlord · Macon, GA · Member since 2013 · 79 posts · 33 votes
    13y

    Simple suggestion for buying any speakers program.

    Check the money back guarantee. If the return policy is solid then get the program and try it out. If its not for you then send it back.

    The key is to actually study it and take action with the info during the return period. Many people buy it and then get lazy with the info and blame the seller.

    Also, search online for reviews about people returning the course. If they had a hard time getting their money back they will post about it...then be careful about buying yourself. A good teacher will always honor their return policy.

    3Reply
  • Terry Portier
    Engineer · Wichita, KS · Member since 2012 · 396 posts · 36 votes
    13y

    The best source of info and a good starting point is here: http://www.kslegislature.org/li_2012/b2011_12/statute/

    I spend all my fun free time there J

    Register and obtain Articles for the LLC does not require an attorney simple form"DL". Here:

    http://www.sos.ks.gov/other/articles_of_formation.html

    Fed tax here,

    http://www.irs.gov/publications/p3402/ar02.html#en_US_publink1000205907

    State,

    http://www.ksrevenue.org/busregistration.html

    Note: Get a hold of them, in 2013 KS passed a new law that passive income from a LLC in a General Partnership(default when you register) is not taxed. If you elect sub chapter S and have W2 wages it is.

    Business tax registration here: Form CR-16, simple and again FREE!

    http://www.ksrevenue.org/forms-btreg.html

    Labor laws.

    http://www.dol.ks.gov/contact.html

    You don’t need to spend a bunch of money on junk generic guru courses, get familiar with the fed and state requirements, including CLP (commercial liability) and WC insurance. You can talk to state attorneys on the matter(s) as I have or private some for free once you know what you are talking about based on research from credible sources like I posted above, or case law in the state of KS.

    You don't need a "CPA" necessarily a good tax preparer can also help with every aspect of running the business and growing it. If you go public a CPA comes in handy and the cost for one. There are law offices out there that deal with many of the areas of law that LLC's touch and it is not just Real Estate.

    2Reply
  • Terry Portier
    Engineer · Wichita, KS · Member since 2012 · 396 posts · 36 votes
    13y

    Here I thought I'd share this guy and some notes since I preparing to add an attorney to my team soon. I talked to him about my contracts he helped me for free. Just call around and get with some people in state offices. One thing great about our state is for the most part people in state offices are VERY friendly and helpful unlike some other states and now with the new tax benefit and no franchise tax we are getting up there with DE, NV, and WY as "Business Friendly" ...It to me is a no brainier to not go corporate with the tax benes, and the state is making alot of effort to help small business grow here.

    My LLC has grown to a point I don't have time I will seeing private attorney' starting Monday..I also found a tax and business person that knows more than all the CPA's in the firm.

    Spoke w Tom Hatton, attorney in the KS Dept of Revenue, Policy & Research. He stated that 1.5% is a reasonable charge to be assessed and should be referred to as "interest charges and late fees". "Usury statutes" limiting collection to 10% APR apply to financial lending institutions not retailers or a "retail business". He said that a construction company selling services is considered "retail". He suggested referring to a department store credit interest and fee policy notices (I save what I get in the mail from Macy's, JCPenney, etc.) for contract language and also having an attorney review the contract.

    0Reply
  • Eric F.
    Real Estate Investor · Raleigh, NC · Member since 2012 · 427 posts · 297 votes
    13y

    I was recommended this program today. @Brady Hanna did you ever buy it?

    0Reply
  • Brady Hanna
    OP
    Investor · Shawnee Mission, KS · Member since 2013 · 82 posts · 12 votes
    13y

    @Eric F. -I didn't end up buying it due to the reviews on here. I just found a good accountant to set up my LLC for me.

    1Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    12y

    It is very easy to form an LLC. The problem is that there are many corporate formalities you need to follow and understand if the are going to do you any good. Any accountant can competently form and LLC, they can explain the tax benefits very well to you. The problem is they will not advise in most cases about corporate formalities, and strategies to prevent piecing the corporate veil. An attorney can explain that to you. It would appear this guy is trying to educate folks in all of these areas. Most do not want to go to the work to learn all of this information. If you plan on building your income or retirement around real estate, if you buy insurance for protection, your are being grossly negligent if you don't educate yourself or talk with an attorney as part of your planning.

    I doubt this guys products are as good as he claims, but I have no idea. You should meet with an attorney if you are going to form an LLC or Corp. Same is true with a CPA for taxes. Unless your line of work has caused you to be fully educated in these areas get professional advice. You don't have to pay $1,000 for a 10 minute conversation, but its not like when you fix a leaky pipe, if you mess it up you have a leak and water damage, you may lose your entire investment.

    If you plan to build a real estate business worth thousands or millions spend a few hundred on an attorney and a CPA. It is just good planning.

    3Reply
  • Carl Gryska
    Los Angeles, CA · Member since 2014 · 22 posts · 3 votes
    12y

    I bought the LLC Master Machine and though I think there is some valuable information I wish I saved the money for something else. The free e-mail Q and A that Al gives you is very vague and Al and his team have not been very responsive to my questions. So far he has given me other Attorneys contact information and he continually plugs his own private consultation. If I am going to pay an attorney to set up my LLC then why would I need his program?!!

    I wish I never bought this

    1Reply
  • Pat Marco
    Real Estate Attorney · Manhattan, NY · Member since 2014 · 129 posts · 106 votes
    12y

    The concept Al Aiello shares in his LLC Master Machine is basically the best one for Asset Protection because it is based on stripping equity. But his structure would not stand a chance in any court of law because it is based on a fake loan.

    If you will use any Guru for such work, then they need to give you the turnkey structure personalized based on your needs.

    Very few Gurus do that type of work and most would rather sell the books and CDs as well as videos etc.

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    Most likely you can spend an hour with a good attorney for less money and walkout with something tailored to your needs than some guru BS. :)

    3Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    12y

    I have not done a lot of research on equity stripping techniques. I am very leery of them. I have seen some folks go to prison for trying to hide assets by using fake loans. Without seeing the actual plan I cannot give any better advice. There are some ways to protect equity using multiple companies but it is very easy to have in depth discovery tear them down, and I have seen bankruptcy trustees shred some pretty fast. Undercapitalizing companies is also a very good way to start piercing the corporate veil as well. A good insurance policy can get you millions in protection for only a couple of hundred dollars. Throw in a few million in an umbrella policy and it is hard to imagine a tenant suing for enough to get past the insurance policies to get a crack at the company assets. Then if you even have a few rentals to try get any further than that would require a bad act of amazing proportions. Like maybe Bernie Madoff? I do not know the cost of setting up a lot of straw companies, but the work to keep them intact and properly functioning would probably be better spent buying more insurance and spending your time buying or managing property.

    2Reply
  • Pat Marco
    Real Estate Attorney · Manhattan, NY · Member since 2014 · 129 posts · 106 votes
    12y

    I agree with Jerry W but please understand that you do not ever structure asset protection with "fake loans". What I wrote above is after you get insurance You set up a separate WY LLC (Wy is best for this) and capitalize it by owing money to it (it is all in the proper drafting of the Operating Agreement)

    The money you owe to it is then drafted as promissory notes and liens get recorded against each of your assets stripping any and all equity .

    I have used this technique for years and have known very few attorneys that are actually familiar with how to properly set up these structures. Usually it is set up for the wealthy. (Trump does not use anonymous C corps - he has TRUMP in big letters on his buildings because my understanding is his attorneys use this very same technique)

    So the liens that strip the equity in your properties are not fake loans, they are created to truly capitalize a legal entity, hence the "economic reason" that holds up in court.

    Look it up on line and you will see there has not been one federal case challenging such an arrangement provided your liens were recorded "prior to" any lawsuit being initiated or filed against you.

    This structure saved an acquaintance of mine millions in a lawsuit on an apartment building in Chicago, where the litigants tenants wanted to slap him with punitive damages in the millions, but could not because there were no equity and if they would've won and gotten a charging order they (the plaintiffs) would've been stuck with a phantom income tax bill based on IRC 77-137

    Pursuant to Revenue Ruling 77-137, the IRS requires the judgment creditor in possession of a charging order to pay tax even though income was never distributed!

    There you have it... The Ultimate Asset Protection for the least amount of money because all you have to pay for on a yearly basis to protect all your assets is the renewal fees for you WY LLC with the resident agent and that costs a few hundreds a year (which is less than I pay in yearly insurance on one of my smallest properties) therefore seminar gurus can't afford to sell this best structure and instead resolve to separating assets in multiple LLCs, anonymous C Corporations and complicated trust accounts etc

    6Reply
  • Michael Moikeha
    Investor · Portland, OR · Member since 2014 · 354 posts · 149 votes
    12y

    @Pat Marco

    So as I was reading your post, my eyes slowly started to glaze over, as I realized I know nothing about company structure and asset protection—comparatively.

    I would love to read more on this information you shared, but I do not want to get tripped up by weeding through false information, because as you stated, even attorney's may not know this. So if this is the case, how trustworthy is my google search going to be?

    Do you have any resources you can point me towards so I may be able to study and learn more?

    0Reply
  • Derek Robinson
    Investor · Atlanta, GA · Member since 2009 · 1 post · 0 votes
    12y

    As I listened to the presentation on this product (https://vimeo.com/57185282) the first place that I chose to look for reviews was the BP community, and lo and behold I came across this post. While I'm relatively inexperienced in RE Investing this community has been a tremendous help in information and providing me with a solid foundation to begin with, thanks everybody!

    0Reply
  • Account Closed
    Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    @Jerry W.

    I agree most gurus teach how to hide assets by using fake loans but Pat Marco

    Is way of track on what is trying to tell people on Ultimate Asset Protection which he is promoting, and if I got Pat in on a deposition, I would tear his house of cards down in no time flat, and he says he is a lawyer, and he knows a deposition is under oath and lying he could lose his license? Pat you said it saves one of your acquaintance millions can you refer me to that case, so I can review it and sorry I don't fall for you cannot do that.


    Joe Gore

    0Reply
  • Elochito Slaughter
    Houston, TX · Member since 2014 · 2 posts · 0 votes
    11y

    Great feedback....sat thru a long presentation of "hard selling" and worst case scenarios....did not consider all the reading to comprehend Al's process....best to leave the folks that work in this arena rather than try to learn via online "guru"!

    0Reply
  • Eric Hiltner
    Wholesaler · New York City , NY · Member since 2009 · 15 posts · 7 votes
    10y

    I've done 4 or 5 LLCs on my own. They are simple, one member for one property for one LLC. I haven't had any problem. I read books and learned more from just filling out the forms from the the government and studying the books. Just start by doing it. With more than one person involved, you may want an attorney or find someone who's done the work, someone like you. and they may probably be able to give you more good advice than everyone else put together, especially someone who stand to make a lot of money from interacting with you.

    0Reply
  • LINDA WETZEL
    Sebastian, FL · Member since 2015 · 2 posts · 5 votes
    10y

    @Pat Marco

    How is this different from the other "fake loans?" There is no actual money exchanged for the equity. 

    0Reply
  • Kevin Griffin
    Vero Beach, FL · Member since 2016 · 53 posts · 32 votes
    10y

    Man, unbelieveable.  After reading this thread, and many others unfortunately, all you see is one or more people saying things that sound absolutely accurate.  Just to read a following post saying the previous post was baloney.  So once again you've wasted your time and come up empty handed; except that if this happens often enough, you start to seriously doubt the credibility of Bigger Pockets.  I guess my comment about all this to Joshua Dorkin is: If you are as passionate as you say about real estate investing (and we are led to believe that Bigger Pockets was formed because of you running into this same problem on other forums, why not figure out a way to ask professionals to give us the correct information, while explaining why a post about a subject is inaccurate, and letting the original poster reply back?  If they were told by you that they have to cite law and precedence (in particular IRS law and precedence), we would get to a legal end point much quicker, and probably weed out many of the folks posting on the forum without correct knowledge.  I agree with Rein Vestor; I'm not interested in spending hours of my time learning about setting up my entity.  I'm interested in learning and making money investing in real estate.  I want to know just enough to make sure I'm operating my entity correctly (meaning knowing about how I'm protected, how I have to conduct my meetings, keep minutes so as not to run afoul of the IRS, read through my operating agreement etc.). In other words, keep it to the minimum. I'm not saying I want to be ignorant about the legal side of my business, just only as knowledgeable as I need to be without almost becoming a lawyer in the process.  Joshua (and anyone else), your thoughts about this?

    0Reply
  • Steven Hamilton IIPro Member
    Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
    10y
    Originally posted by @Kevin Griffin:

    Man, unbelieveable.  After reading this thread, and many others unfortunately, all you see is one or more people saying things that sound absolutely accurate.  Just to read a following post saying the previous post was baloney.  So once again you've wasted your time and come up empty handed; except that if this happens often enough, you start to seriously doubt the credibility of Bigger Pockets.  I guess my comment about all this to Joshua Dorkin is: If you are as passionate as you say about real estate investing (and we are led to believe that Bigger Pockets was formed because of you running into this same problem on other forums, why not figure out a way to ask professionals to give us the correct information, while explaining why a post about a subject is inaccurate, and letting the original poster reply back?  If they were told by you that they have to cite law and precedence (in particular IRS law and precedence), we would get to a legal end point much quicker, and probably weed out many of the folks posting on the forum without correct knowledge.  I agree with Rein Vestor; I'm not interested in spending hours of my time learning about setting up my entity.  I'm interested in learning and making money investing in real estate.  I want to know just enough to make sure I'm operating my entity correctly (meaning knowing about how I'm protected, how I have to conduct my meetings, keep minutes so as not to run afoul of the IRS, read through my operating agreement etc.). In other words, keep it to the minimum. I'm not saying I want to be ignorant about the legal side of my business, just only as knowledgeable as I need to be without almost becoming a lawyer in the process.  Joshua (and anyone else), your thoughts about this?

     There is tons of correct information here. I myself correct a lot of tax issues. You can see from my post numbers. I also spent a good amount of time here as a Moderator before I got too busy to answer it all here.  Also, IRS does not make law, they create publications based upon their understanding and they later get tested in court. the IRS publications are NOT law, just suggestion.

    [email protected]224-381-2660
    1Reply
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