Any advice on asset protection with using a CMG All in One Loan

Member since 2024 · 20 posts · 12 votes

Has anyone used an All in one loan for a property? We are in the process of buying a second home in San Antonio/TX and are really interested financing it with an in the All in One Loan but the loan officer tells us we can not deed it into an LLC and could only purchase it in an "Inter Vivos Revocable Trust”. A quick search suggests that the trust wont give us as much protection as the LLC and we are looking for any suggestions on how to protect ourselves better.

Thanks so much for any tips in advance,

Kristin

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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes

What are you concerned with protecting? You're going to have your signature as a guarantor on the note, so even with an LLC if you default you can be sued for recovery of any shortfall.

When you are just starting out, all you need is good insurance and stable and steady enough income to not worry about defaulting. All these years later I still don't bother with an LLC.

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
What are you concerned with protecting? You're going to have your signature as a guarantor on the note, so even with an LLC if you default you can be sued for recovery of any shortfall.
When you are just starting out, all you need is good insurance and stable and steady enough income to not worry about defaulting. All these years later I still don't bother with an LLC.
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Skyline Properties
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Kristin Solbach
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Member since 2024 · 20 posts · 12 votes
1y
Quote from @JD Martin:

What are you concerned with protecting? You're going to have your signature as a guarantor on the note, so even with an LLC if you default you can be sued for recovery of any shortfall.
When you are just starting out, all you need is good insurance and stable and steady enough income to not worry about defaulting. All these years later I still don't bother with an LLC.
Asset protection in case one of us getting sued (I think it was a BP podcast episode where a lawyer told the story about the son hitting someone with the car and the family of the kid that got hurt suing them and them having to surrender their house.) As far as I understand insurance protects you from different things.. and yes, we are definitely getting good insurance (umbrella policy for just one property?) and it isn't about protection from defaulting...
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Jonathan Bock
Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
1y
@Kristin Solbach
Is your primary residence in TX? Look into homestead as a starter for your research
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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
1y
Quote from @Kristin Solbach:

Quote from @JD Martin:

What are you concerned with protecting? You're going to have your signature as a guarantor on the note, so even with an LLC if you default you can be sued for recovery of any shortfall.
When you are just starting out, all you need is good insurance and stable and steady enough income to not worry about defaulting. All these years later I still don't bother with an LLC.
Asset protection in case one of us getting sued (I think it was a BP podcast episode where a lawyer told the story about the son hitting someone with the car and the family of the kid that got hurt suing them and them having to surrender their house.) As far as I understand insurance protects you from different things.. and yes, we are definitely getting good insurance (umbrella policy for just one property?) and it isn't about protection from defaulting...

Lawyers will always tell you the maximum protection devices available. You should have an umbrella policy to cover everything, beyond maximum liability coverages. Our umbrella is at $4 million. It would be pretty unlikely I could be found maximally liable for anything beyond $4 million plus my liability on each unit. As far as protection from default, no it is not going to protect you there. No bank is going to give you a loan on an LLC officer guarantee if/when the LLC has no assets. You're going to have to give a personal guarantee, which means if your LLC defaults on that house they still can recover from you.
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Kristin Solbach
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Member since 2024 · 20 posts · 12 votes
1y
Quote from @Jonathan Bock:

@Kristin Solbach
Is your primary residence in TX? Look into homestead as a starter for your research

Aloha Jonathan,
no, we live in Hawaii. Buying this as a second home... any further advice?
Kristin
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Jonathan Bock
Accountant · Bryn Mawr, PA · Member since 2023 · 409 posts · 321 votes
1y
Keep it simple versus some of the esoteric structures being pushed.
Focusing on the foundational basics and your operations is more important long term.
Never a one size fits all solution to an asset protection strategy.
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