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All Forum Posts by: Philip Barr

Philip Barr has started 0 posts and replied 47 times.

Post: aspiring rental income property owner

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

Starting out as a landlord can feel overwhelming, but one of the smartest ways to feel more confident and stay focused is by making sure your rental properties are protected. When your investments are properly set up, you’ll worry less and be able to focus more on finding good deals and growing your portfolio.

A great way to protect yourself is by using LLCs, or Limited Liability Companies. Think of an LLC like a safety box—it helps keep each property separate from the others, so if something goes wrong with one, it doesn't affect the rest. I usually recommend putting each rental property into its own LLC. This helps protect your personal savings, home, and other properties from legal or financial trouble tied to just one rental.

You can also take it a step further by creating a holding company, ideally set up as a Wyoming LLC, to own all of your property LLCs. This gives you an extra layer of protection and makes it even harder for someone to come after your personal assets.

Of course, it is important to have a well-drafted lease agreement as well, outlining the responsibilities of the parties, the requirements for termination, security deposit, etc., with little to no ambiguity. That will help prevent disputes.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Post: What do you wish you knew when you started out?

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

One of the best ways to ease fear and stay focused as a new real estate investor is to make sure your investments are well-protected. When you know that your properties are legally separated from one another, it brings peace of mind, so you can concentrate on what you do best: finding great deals and building your real estate portfolio.

I always recommend that clients use LLCs (Limited Liability Companies) to help shield themselves and their assets from liability. Placing each rental property into its own LLC can protect your personal assets and your other investments from liability tied to any one property. It essentially acts as a compartment to seal off liability from that property. Additionally, setting up a holding company—ideally structured as a Wyoming LLC—to own those rental LLCs adds another layer of protection. This approach can help guard against personal liability and keep potential creditors at bay.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

You made great points about having your ducks in a row on LLCs. Too often, I run into clients who tried to DIY their LLC setup. Many of them didn't even have operating agreements; those that did have very shoddy ones that didn't properly represent the taxation status of the entity or address potential creditors. It is very important to have a well-drafted agreement in place that is not just a five-page sample template found online.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.


Good stuff, Brad. I hope everything goes well with the deal.

I agree with some of what has been said here, it really depends on weighing the income potential of the property versus encumbering your home to make this happen.Many investors do it, but it is a matter of sitting down and really weighing the pros and cons of the investment and doing research.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.





Post: Amateur looking to be legitimate income

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

As far as the LLC side, it is important to separate each property into its own LLC. Part of asset protection is compartmentalization. If you put all of your eggs, or in the case rental properties, into one basket, then you risk losing them. Each LLC should be set up in the state where the property is located. This gives you the ability to enforce your rights in that state since the entity is recognized, such as eviction. To provide protection against personal liability, it is best to have a holding company own the LLCs instead of you personally. A WY LLC works really well for this, considering its strong protections against personal creditors.

You would not have to file any extra tax returns with this structure. You can have the LLCs be disregarded to you tax-wise. This is passive income that can just flow down to your personal return.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.


Post: Wholesale Real Estate

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

Hi Lee, glad to see you here on the forums and that you are asking questions.

You will need to determine whether wholesaling is legal in your local jurisdiction and whether you need a license to do so. You can confirm that with some research and help from a local attorney in your area.

However, once you have determined your pathway to wholesaling real estate in your area, it is a good idea to find contracts with an assignability clause. This clause allows you to freely assign the contract rights to close on the property to an end buyer. You will get a fee for selling the contract rights.

But say the contract is not assignable by virtue of the language therein. One thing you could do is enter the contract with an LLC or trust, and then sell the ownership of the LLC or trust to the end buyer. That way, the contract is never assigned and the parties stay the same, but you can sell the ownership of the buyer that is on the contract.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Post: Finally Diving In!

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

Hey, great to hear from you and welcome to the community here on Bigger Pockets.

One of the important things when it comes to locations is making sure that you have an appropriate business entity to own your rental property as an investment. Owning rental properties in your personal name can subject you to liability from those properties; for example, if someone slips and falls on the property, that liability can reach your personal assets. We want to use LLCs that are set up in the state where the property is located to protect you and also to ensure that you can enforce rights in that state.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.



Post: New wholesaler in the game

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

Wholesaling is a good way to get started in real estate investing. It can help you identify properties that are good opportunities. A helpful tip to learn is to identify contracts that have an assignability clause that allows you to sell the contract rights to an end buyer freely. That makes the process much easier.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

I haven't done wholesaling in Missouri, but a good general recommendation for wholesaling is to review the contracts closely and determine if the contract is assignable. If it is freely assignable to an end buyer, then that makes your work much easier.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.

Post: New to the Game

Philip BarrPosted
  • Attorney
  • Posts 50
  • Votes 93

Welcome to bigger pockets, Arthur.

Getting some experience in property management and then building from there is a good strategy. You could even venture into things like wholesaling to get your feet wet before making your first purchase. Wholesaling involves purchasing the contract rights to close on a property and then selling those contract rights to an end buyer. That may provide some experience in finding good deals.



Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.