All Forum Posts by: Scott Smith

Thanks for the praise  @Costin I.!

@Anthony Fontana Your partner is right to be concerned. Physicians have special considerations when it comes to asset protection, and he certainly would want to keep his name off of any publicly filed documents to ensure his personal assets are protected.

There are a few ways around the financing issue, including buying in your own name and immediately placing the property in a Land Trust to get around the Due on Sale clause. But you want to be careful to do this correctly, particularly if you're forming an LLC (venture-specific or otherwise). There are pros and cons to both of these tools, and quite a few benefits to using them together for the strongest asset protection plan possible. An attorney who is familiar with asset protection generally, and Land Trusts in particular, could ensure you're doing things by-the-book.

@Kyle Marek--Using a property manager is totally a case-by-case thing, in my opinion. The quality of your property manager is going to be the deciding factor here.

No matter what you do, it's best to make sure that if you go with a property manager, that you manage that person correctly. This especially applies to handling on-site property managers. The information in that article should help you out, but it boils down to just using a smart contract and communicating very effectively. Definitely don't use an informal arrangement based on a handshake. 

On the multi-family thing: we recently recorded an interview with Rod Khleif, who really endorses multi-family investing. He talked a bit about how handling maintenance with properties spread all over a state (i.e. a couple hours away, like yours) ended up really costing him. Whether property management is something you do yourself or not is going to come down to how valuable your time is to you, and what other options you have.

Hi Kyle,

Have you considered setting up at Series LLC for your buy/holds? This type of asset protection dos not need to be created in the state in which you reside nor the state that the properties lie. This makes it very easy to add or remove properties or other assets from the structure.

A Series LLC is a type of limited liability company that is utilized to protect and separate assets. Think of the Series LLC as the parent LLC and the individual series as the children. Each individual child series holds an individual asset.

When the property is transferred correctly, the property will be owned by the Land Trust, which in turn flows to the individual child Series, as Beneficiary of the Land Trust, and then finally flows to the parent Series LLC, as Member of the individual child Series.

The Series LLC has benefits in lawsuit prevention, separation of assets, cost savings, and tax benefits. Please send me a personal message if you have any additional questions. I would be happy to explain this process in more detail.

Best of luck!

Scott Smith

Hello @Cade Schacher ! Welcome to real estate investing and the world of Bigger Pockets! @Natalie Kolodij is right in saying that a lot of the answers to these questions will be specific to your own tolerance for risk, investment opportunities, and goals for your real estate empire!

However, its never too early to start learning as much as you can! You should check out my Bigger Pockets podcast, it could provide some more helpful information about the topic! 

Hi Mika'ele,

For ease of understanding, we will call the Texas Series LLC 'parent' and the property transfers 'child.' When the property is transferred correctly, the property will be owned by the Land Trust, which in turn flows to the individual child Series, as Beneficiary of the Land Trust, and then finally flows to the parent Series LLC, as Member of the individual child Series.

The trust agreement is a private document and will not be recorded or filed in the public records. Since the trust agreement specifies the ownership structure of the Trust and that trust agreement is not made public, the Client's name remains anonymous. This process is how the clients name remains anonymous for each property transfers no matter the location. 

I hope that clarifies things. Please send me a personal message if you need further clarification! I would be happy to explain more!

Regards,

Hey @Brenda Whittaker! 

I am an Asset Protection Attorney in Austin, Texas. Have you ever heard of a Series LLC? Similar to a traditional LLC, they offer limited liability and pass-through taxation. However, in a Series LLC you can file one document with the State and then create as many "Children" LLCs as possible - with each "Child" possessing limited liability from the other "Child" LLCs in the Series.

Combined with our use of Land Trusts and an Agent Trust, our asset protection strategy offers anonymity and ideal estate planning services. You can learn more about the benefits of a Series LLC right here. 

I also have a podcast here on BP, if you are interested in learning more. 

Hey @Anthony Polcyn - smart of you to think about asset protection and tax savings. I am an Asset Protection Attorney and Real Estate investor in Austin, Texas, so I definitely understand the importance. Have you heard my Bigger Pockets podcast? I provide a lot of good information about accomplishing these important goals. I have also written several articles on this exact subject, which you can view here and here. 

@David McPhail - welcome to the world of BP and real estate investing! Have you given any thought to asset protection? My Bigger Pockets podcast is on this exact subject, if you are interested. 

Hey @Garrett Bailey - smart of you to think about protecting your properties! I am an asset protection attorney in Austin and, like others on this posting have commented, an LLC or a Series LLC may better suit your needs. Have you heard my podcast on Bigger Pockets? I give some information on this exact subject. 

Hey @Travis Buck, my firm does this exact kind of work! I personally believe the Series LLC coupled with trust funds can provide a great level of anonymity and asset protection.