All Forum Posts by: Stewart Miller

John Anderson the person signing the papers at the bank is the trustee of the trust, which is me. Once again, the bank doesn't know who the beneficiary is so why would they call the mortgage due? I haven't had to do it because a bank has never asked to see the trust document, but if I need to, I can make myself the beneficiary for the bank, the next day print out a new document naming the LLC the beneficiary and take it to court to have the LLC protections and it's absolutely above board. You can switch beneficiaries everyday if you want without having to update any state agency, so no one can possibly know who the beneficiary is unless you show them the document (remember our last thread where we disagreed? Need to know vs. need to show!) We can't seem to agree on anything, John. 😀😀

Stephan Hawkins talk to an atty. I've operated for years this way and have never had a due on sale clause triggered. Nor has any bank asked me to put the property back in my name. Land trust are private documents. They are not filed with any state agency. The bank will not know who the beneficiary is. I assume they could demand that you produce the trust document. So far in my RE career, I've never been asked to produce a trust document. This has been working for me. My structure has been tested (roofer fell off roof. I got tied up in litigation) and everything was above board. It's completely legal and a way around the due on sale clause.

Stephan Hawkins deed the house from the LLC back into your name. Secure financing and then place the property in a land trust. Make your LLC the beneficiary of the trust. The only thing the bank sees is that the property was placed in a trust. They don't know the beneficiary is a LLC. You get the financing and the protections of the LLC without all the hassle.

I agree and disagree. I don't think LLCs are needed to wholesale. I have a separate Corp for all of my flips. If I were going to wholesale, I would set up something called a special purpose entity (SPE) off of the corp for that deal. As a wholesaler, you enter into a contract with a seller. Your plan is to assign to another party. If that third party backs out, you're stuck having to close that deal. What if you don't have the funds to close? With an SPE, if this were to happen, the seller is now suing your Corp, not you personally (asset protection). So I disagree that wholesalers don't need entities at all because they're not holding onto property. Simply entering into the contract with the seller is exposing you to risk. In Meena Price situation, even if you're not a flipper, I'd set up a Corp and do each deal through an SPE.

Jeff Hall I do own rentals. What I'm saying is all of my individual rentals are in LLCs in their respective state. All of the individual LLCs are owned by one NV LLC, which has anonymity attached. That's what I was referring to when I said I'm basically doing the same thing. Also, this structure helps at tax time. All of the operating LLCs are disregarded entities, thereby allowing me to file one K-1 on my return, even though I have mulitiple properties. John Anderson I've seen a few of your post on different threads. As an honest question, can you expand on why you don't think LLCs are as protective as I think they are. I'm asking because you may know something I don't. From what I've read, you're more of a get an insurance policy and you're fine. What happens if you exceed your policy? Or if your policy won't cover you? My thinking is the LLC simply gives you an added layer of protection for your personal assets. I was always told by any atty I've worked with that insurances are a good first line of defense, but not to depend exclusively on them. As far as fees, all of my operating companies are the same. I file my own LLCs(takes 10 mins online), and use the same operating agreement. So I'm not paying legal fees every time I set one up. Same thing with land trust. I have my original one I paid for and simply switch the date and name on it. My atty reviews all new entities at the end of the year to make sure I'm on the up and up. If there's a special circumstance on a deal, I get the atty involved. Otherwise, I set my own entities up so I don't have to pay attys to do what I can do.

You can also rent a virtual office in that state usually for $49-99/mo. I thought your registered office had to be in the same state.

Jeff Hall isn't what I'm doing essentially the same thing? I know it's not literally the same thing, but close. A series of LLC owned by a "master" LLC. John Anderson good discussion. There's more than one way to skin a cat. I'm not saying my way is the only way, it's just how I chose to operate. I was given other options (leave everything in one LLC and place a lien on the LLC was one). My attys (both in NJ & NV) communicate so one knows what the other is doing. It's not too complicated and I don't spend a fortune on legal fees.

Jeff Hall I didn't like the idea of a series. At the time, the only series LLC that went before a judge was pierced, so I stayed away and never looked back. I may revisit if car law supports using one. John Anderson I think we're agreeing. You mentioned you knew a few judges who would release the info. That's the whole point. You have to go before a judge simply to figure out who I am. Not saying this structure is sue-proof. I'm just saying it's more difficult to get to me, thereby thwarting the frivolous suits.

Absolutely agree about being sue proof, hence, my structure. Florida is not like NV in that you cannot put a nominee on entities. In NV, the whole point of a nominee would be voided if you could simply look on the Sec. of State's site. I can do the same in NJ without going before a judge. That's why states that have nominees are so popular. I'm not saying they won't sue you, I'm saying as an investor with assets, it's my job to make it as difficult as possible for them to get me. In you're earlier post, you said, 'if they know what you're doing.' The whole point to a nominee is so that they won't know what you're doing. Once again, no structure in the world will stop you from getting sued. However, I don't have to walk around with a target on me or make it easy to get sued. And in my example, that suit had nothing to do with me improperly running my LLC. If I operated inappropriately and legitimately caused harm to someone, believe it or not, I wouldn't need a judge to tell me to pay that person. I'd be a man and right the wrong. I'm more concerned with professional plaintiffs out there looking to get rich quick! Another quickie I can give you. A friend's (investor with over 1M in assets) wife rear ended someone. Minimal damage and the person hit told the officer on the scene she and her child were fine. Ended up going to the hospital 8 days later!! Sued my buddy and won over 75k. I suspect she lawyered up and that lawyer ran an asset check on my buddy. Once the lawyer saw what he owned, he told the driver to get a hospital report and that $1,000 minor accident ended up being 75k plus legal fees. Or, I bought a property that turned out to be contaminated. Wasn't worth cleaning up contamination. LLC filed bankruptcy. Bank wanted to chase me. Once they realized how I was structured, they stopped the fight. I can give you 2 other examples of this structure literally stopping a suit. In my career, the roof story is the only time I've paid out of pocket ( I could have submitted to insurance but it wasn't worth it). The contamination and 2 other stories were literally stopped before they were filed because of this structure. Some times it has nothing to do with your business or how you run it. It's more about not having your business on public record for everyone to see. I operate on a need to show basis. You tell me why you need to know, and I'll decide if I want to show. If all my info. is on public record, I can't control who views it (mainly professional plaintiffs).

John Anderson I can attest to this structure. Had a roofer fall off one of my roofs. I have homeowners and a personal umbrella, so I'm not downplaying the importance if insurance policies. Long story short, I got tied up in the litigation (simply because I owned it. I wasn't there when it happened). Once they realized the LLC was owned by a NV LLC, they realized they'd HAVE to go to NV and present facts before a judge pertaining to why they needed to know who the owner was. Once they realized that, they came to the table to negotiate. Ended up paying 2k (his legal fees) so I didn't even have to submit to insurance company and my LLC was dismissed as a defendant before he sued his employer and their insurance carrier. (Btw, owner showed up and literally said, " I've been telling him he needs to wear a safety harness! Meaning, this employer KNEW he had an employee who doesn't like following safety precautions, but still had a job.) This structure simply puts you in a much better negotiating position. If you own all of these properties in your name, you're a target. A plaintiffs atty. is much more likely to come after you if they see everything you own. This structure helps thwart the lawsuit before its filed. Also, insurances are a good first line of defense, but aren't a good enough defense for me to rely on exclusively.