All Forum Posts by: Robert Herrera

@Jerry W. No one is saying to Hide Anything. You own XYZ LLC. You claim you own XYZ LLC. XYZ LLC is a business and has it's own assets. No GURU is telling me to HIDE anything. I know what instance you are talking about and everyone has read about the GURU telling them to lie and they got caught. This is not advise TO LIE! This is advise to setup your plan AHEAD OF TIME.

You are referring to moving your money around once you are in a lawsuit, to try and avoid it. I'm talking about asset protection plan BEFORE you are sued. - already addressed this if you read my previous response (which you didn't take the time to do).

OBVIOUSLY you didn't even take the time read before responding with a GENERIC response.

I already said NAVADA and WYOMING protect single member LLC's! Also, a charging order is going after a persons interest in an LLC, not their salary from a company. These are 2 different type of Incomes and are not the same. Maybe you should consult an attorney who can explain it better to you before putting out FALSE ADVISE

If you read PARAGRAPH 7 and not just read what you feel like.

No One Said ANYTHING about FAKE MORTGAGES, WOW i think you just like to post whatever you feel like.

No One Said ANYTHING ABOUT HIDING IDENTITY. What you are referring to is ILLEGAL and is NOT what i was talking about at all.

Also, how do you become a moderator and not read what people are posting?

@Paul B. 

Unfortunately there is no central database that maintains bank account numbers. Prior to 1999, locating bank account information was the most controversial area in a search for assets, but new banking regulations have brought about significant changes in data availability. Prior to the banking changes, a variety of techniques such as use of credit reports, information subpoenas and pretext calling were used to uncover bank account information. Under the new law, pretext calls no longer are permitted when attempting to obtain account information. Bank customers now have greater protection from searches. However, once a bank account has been located and verified with either social security or tax ID numbers, it can be attached in payment of court ordered judgments. 

On that note, we enter into LLC, and charging orders. If you own your properties in a proper LLC, and you are keeping separate accounts that don't co-mingle personal and business funds, you are in a good position to keep your money.

1st open an LLC that will act as your Real Estate Business and Management company for your other LLC's. Lets say it's XYZ LLC. Now use XYZ LLC to buy properties. Put these properties in LLC's that are owned and created by XYZ LLC. example: 124 main LLC and 445 Rodeo LLC Are formed by XYZ LLC and are used on title for properties.

We are talking about an OUTSIDE Attack here- I.E. the lawsuit is from outside the LLC's. Meaning they do an asset search on YOU and get XYZ LLC as an Asset. Since this is a BUSINESS and not Personal Property, there are new rules that take affect.

First, if you are sued and they win, you will be pursuant to a Charging Order, meaning they come after you as a SHAREHOLDER of the business. When you receive money as a shareholder, that money is transferred to Pay Your Debt First. Your business is not required to Sell IT'S ASSETS, as they are separate from your assets. Your assets are the SHARES of STOCK in the business. 

If you decide to take an Owner/Shareholder DISTRIBUTION then You will have to give that up to the Judgment. If you Decide not to take ANY DISTRIBUTIONS, and instead give yourself a salary that covers your profits, then you will not have to give that money up. You will pay higher taxes, as a salary has more taxes than a shareholder distributions, but you will get to keep the majority of the money.

On a Side Note. Most states protect Multi-Member LLC's and not Single Member LLC's. For this instance, look into Nevada and Wyoming to set up your LLC's as they have the best laws for Single Member LLC's. You can buy properties anywhere in America with LLC's setup in other states.

Your strategy has to happen BEFORE you are SUED. If you are Sued, and you take action afterword to try and cashout refi, this could be used as reason to get at those funds, as you are using this action illegally to stop money from being taken from you. 

If you cashout refi before you were sued, odds are you are using that money to invest in other properties, and are probably buying said properties with these funds, so these won't be in your account for long.

Please talk to a Licensed Asset Protection Attorney, and CPA about these as I am not either one of these.

@Brandon Bennett If you have a free and clear property, and lets say your kid gets in an accident. Lets say they hit someone on the HIGHWAY and its a bad accident. Your insurance covers medical expencses, etc. Then their lawyer does an Asset Search on YOU. Turns out you have a house with TONS of equity in it. There are no liens, so no one else to split the money with. Lets say its worth $250,000 free and clear. The lawyer decides to take a civil case against you, as you are loaded with cash that they want. You lose in court, the judge orders your house sold, and the proceeds awarded to the Lawyer and their client. You just lost $250,000.

On the other hand, if there is debt, lets say you owe 80%, then you only have $50,000 equity. If the lawyer wants to fight in court over $50K small payout, they know they will not recieve anywhere near $50K. First the house is sold, to pay off the $200K in debt. Then They would have to pay Real Estate Agents 6% for the sale. Thats $15K off the $50K. So now they are at $35K. They only get a percentage of the $35K so the deal is looking less and less desirable. Also there is a chance they could lose, and spend a lot of time trying to gain a few thousand dollars. Attorney is going to say it's not worth it, and decline to pursue you. You just saved $50K. 

If you own a free and clear house of $250K, and took out a mortgage of $200K, you would have $200K in your bank account TAX FREE. You don't pay taxes on Debt. Now you can invest those moneys in Other properties. You could put 20% down on a $1M property. This would greatly increase your cashflow monthly, and you would make the Appreciation on the whole $1M. If appreciasion is around 10%. you will make $100k per year just in Equity. So in 2 years you would have a total of $400K in equity, that you can loan against to buy more properties... rinse and repeat.

Fernanda B. I will take this as well. Message me if it's available

Steve Fitzgerald this seems like you are losing big time on this deal. He owes you rent and agreed to pay for half the repair. They are separate. Get the rent, then get more for the repair. If you take less rent to pay for the repair, they are only paying a total of rent, and you're paying the total cost of the repair.

Gregory Flores, Jr. let me know when you will be there. I can meet up with you and show you a few things. I'm at 18 properties at this time, 1 of which is for my Daughters. That way they have their own Cashflow to cover clothes, gifts, birthday parties, Christmas, etc.

Gregory Flores, Jr. I invest in Pueblo myself and have been doing great. I even bought my daughters a rental down there. I know of a few lenders that are telling me a bulk of their business has been from Pueblo recently.

Dan Schwartz if you don't pay, when they due on sale is called, then the bank has to take the property back. That is done through foreclosure.

Brian Irk you can have both the LLC and the umbrella policy. If you quit claim your property into the LLC, everyone always talks about the Due On Sale Clause. The bank can foreclose on the property. This is highly unlikely to happen. This is the way people buy properties subject to the existing financing, and is done every day. The bank doesn't want to foreclose on a performing asset. That means they want to be paid on time, by whoever sends the check, they don't care. If they foreclose, they are looking at 6 months to a year to get the property back. In that time, they make no money. Most of the time they get the house back destroyed by the owner before they took it back. Now they have to re sale it at auction, for a lower price than it was worth. Seems like a lot of trouble for negative returns, but they do happen every once in a while, and there is usually a bigger reason to cause this to happen.

Scott Titus If you pay off your house, you are a HUGE TARGET for a LAW SUIT. If you have debt on your property, attorneys don't want to go after a house with not much left over after paying realtors and the mortgage off. If it's free and clear, look out, you are the #1 guy they LOVE to sue. If they win, $$$$ loss is huge. Investors buy for Cashflow. Appreciation is speculation and is gambling. It's like the stock market, see crash of 2008. If you were Cashflowing through the crash, it didn't really matter if it was worth less. If you still had it, it would be worth more now today. If you build up equity in your properties, do a cash out refinance. You get your equity out TAX FREE. You don't pay taxes on Debt. In your case, having a 5 year loan, I would need more info on the type of property and cost. Is this a modular with short term financing?