All Forum Posts by: Costin I.

I agree that removing the concrete to install maintenance required grass is not a good alternative (and I doubt is cheaper too). I suggest to look for solutions where you keep the current hard surface - at a minimum I would just pressure wash the concrete. 

But if you have time/money/resources, here some more ideas for you:

- look into "concrete stamping" and "concrete staining"

- if you have cracks, rather than repairing the cracks, make more of them ("concrete scoring") and use them, fill/grout/stain them with a contrast color/material to draw in a natural looking flagstone design or pattern.

1. If it's in C class neighborhood, why do you have to do anything to it? Take care of the house and maybe just put some big container planters with some cacti/succulents.

2. You can use the metal posts for wood fencing, especially if they are in solid concrete. There are metal brackets that can "hug" the pole and fence beams can be screwed in (I have it at my house). 

3. Go to Houzz.com and look for inspiration. Search for "concrete yard" (https://www.houzz.com/photos/query/concrete-yard/). You can also search for "concrete planters", "concrete containers" or xeriscape.

4. Same thing on Pinterest - search for "concrete yard" and "concrete driveway", etc. 

Insurance is more like protection against accidents, while asset protection is against litigation -  insurance is not going to cover you all the time. 

You want to separate your asset holding entity (which just hold your assets) from the public facing operations entity (which does the property management, leasing, hiring, etc).

You should read Garett Sutton book on Loopholes of Real Estate (both for asset protection scenarios and for why you might want to avoid joint tenant deed, plus is a good book for RE investors). 

I spent hours researching the whole LLC question and asset protection matter and all the rabbit holes it opens, here on BP and other sources. I gathered it all in a 50+ pages document touching on formation and maintenance of LLC and business structures, transferring, strategies, trusts, anonymity, insurance, levels of protection, etc. including when you should do it, how many properties per LLC, due on sale clause, selecting an attorney, fees, checklists and resource materials. PM me and I can send it your way if interested.

I don't think you can get a HELOC (Home Equity Line of Credit) on investment/rental properties. You can get a HEL (home equity loan) which is basically a cash-out refinance loan, one time use (you can't pay the balance down and reuse it like a line of credit, and interest accrues from first day regardless if you use the funds or not), dependent on LTV, lien position, equity %, loan amount (many banks do no lend under 50K), etc.

You can get a Business Line of Credit secured by (one or more) investment property (or asset based line of credit or portfolio line of credit) that will act like a HELOC, but you need to talk with a bank officer who knows about this (usually a commercial lender, don't bother to ask about HELOC from a residential lender because they only know residence HELOC product). You can then use this line of credit when you need it (when you find a property), pay it down (often after repairs and placing a tenant you can refinance into a fix mortgage and pay down the LOC) and reuse it.

You can get a HELOC on your residence - but I think with the new tax rules, HELOC interest is no longer deductible and I don't think is something you want to use.

A detailed resource on Due on Sale: https://www.johntreed.com/blogs/john-t-reed-s-real-estate-investment-blog/66000067-the-truth-about-getting-around-due-on-sale-clauses

For all I understand, there are many types of trusts revolving around the intended purpose (e.g. trusts formed for the purpose of holding investment real estate might be called land trust), but as a legal entity there is only "trust". There are certain structural items that do not change: the trustor (or grantor), the trust corpus (or trust estate), the trustee, the successor trustee, the beneficiary.

If you want to find out more about land trusts (particularly in Texas): http://www.lonestarlandlaw.com/Texas-Land.html

1. Yes, every property gets its own trust, but you should look into Series-LLC, instead of the rather expensive option of individual LLCs.

2. The transfer deed (recommended to use warranty deed for title insurance preservation) gets recorded in the Trustee name (initially the attorney creating the trust). The trustee after recording resigns and trustee gets changed back - the trust has language to that extent built in.

3. The property will show as owned by 123 Main Street Trust, thus giving you a layer of privacy/anonimity (from the "bottom"). Like Alexander Burnett said above, Land Trusts is a privacy feature. It is a private document that is typically not recorded thus making it a difficult entity to sue. The ownership of the Trust is often kept anonymous and out of the public records.

4. You have another trust acting as manager of your Holding LLC, thus giving you a layer of privacy/anonimity (from the "top").

5. You do NOT want the taxes to go to your name/address, that will invalidate all your eforts for protection & anonimity.

6. You should have another LLC for all operations, all public facing interactions, rent collections, property management, contractors hiring, lease contracts, etc. This "Operations LLC" doesn't hold any assets and only has a property management contract with your "Holding LLC", the main idea being you separate your asset holding from operations and from your person.

And like Chris says, "I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.".

Here is another set of examples from a BP member: https://www.biggerpockets.com/forums/51/topics/177....

And everyone interested in this topic might benefit from reading this forum post: https://www.biggerpockets.com/forums/51/topics/177095-asset-protection-podcast. 

Incidentally, I found an example https://www.biggerpockets.com/forums/311/topics/183825-due-on-sale-clause-was-called-by-bank?page=2:

Originally posted by @Cameron Skinner:

@Serg S If it were me I would just quitclam deed it back in my own name. I own several homes in mine and my wife's personal name that have conforming loans, but many more in LLCs with commercial loans. I treat the LLCs as "disregarded entitys" for IRS purposes so no more book keeping needed. Bam! lawsuit one tenants dog bites another. Attorney sues my wife. I send a brief answer to the complaint which you have to do within 20 days in FL or you automatically lose. I then call the Attorney explain my wife is Judgement proof. Our personal home is judgement proof in FL our cars in one of our LLCs any cash in retirement accounts or LLCs, and the only homes we have in her own personal name has loans against them. Even though they have good equity the cost to go foreclose on them would destroy any equity. He sends interrogatories "questions" which we answer honestly also tying to get our insurance info, I just wrote in that question I have no insurance that covers dog bites. 6 months later he dropped suit. Good luck

The missing rail case I'm pretty sure is negligence (landlord duty to maintain property up to code) and at fault, especially if notified about the issue - insurance will not cover in this cases (more than that, I think they will look, maybe even help, to blame the insured in order to deny the insurance claim - in other words, I don't think their first priority is to help you, but to find reasons to deny the claim). Maybe the umbrella policy? But even that is supposed to come into play once the actual insurance policy is exhausted.

The mold cases...I wonder if insurance got involved and covered any, and that's the reason many of them got setled. It's still not answering the questions raised in this post; it only scares me further, as here in Texas, mold (and there are all kind of) is pretty much part of landscape. Especially since one can file a lawsuit for mold and you'll have a hard time proving absolute cleanliness.

FYI:

https://www.moneypit.com/fix-improve-it/home-safety-health/mold/mold-free-home-top-10-tips/

https://www.mnn.com/money/green-workplace/stories/creating-a-mold-resistant-home

And I think that's where the whole asset protection strategy comes in play. It's not so much to protect you once you got sued (since even with an LLC you'll still have to hire an lawyer and incur defense costs)(plus you can get sued for whatever reason, and you'll still have to pay to defend), but to discourage and make it harder to even start legal action against you, and to make it harder/improbable to collect if it comes to that.

Now, looking at those setlements in the mold cases, a small fish hit by that is probably no longer an investor and member here...so I don't think we'll hear any "got sued and lost it all" response, but I still hope a bigger shark might share some from his/her survivor experience and how insurance and PUP/LLC/Series-LLC/Corp/Trust/LandTrusts/EquityStripping protected them.

@scott radetich I'm in a similar situation (wondering about best ways for asset protection and trying to understand all the structures and actions required for an effective protection) and I think this post is great. If you start looking into this subject you'll find plenty of lawyers promoting their services with all kinds of scary scenarios - found one claiming statistics that show 1 out of 4 persons will be sued in the next year.

So, me too I'm looking for some real world examples of when you, or someone you personally know, has been sued and lost, and i don't mean lost 15k I'm talking real money, six/seven figures, the property itself, etc.