Asset Protection Plan Any recommendations????

Question

I had a meeting with Anderson Consulting (they did an 8 hour webinar for free). And to form 2 LLCs and a Land Trust is $6,000. They say their operating agreement is superior (90 pages) and that as an owner you're not easily traceable (if at all).

Fee is for Wyoming land trust for primary and two LLCs for (2 investment properties).

That seems a crazy price to pay. But if I go through a basic online LLC - I'm not sure there's a way to be "invisible'.

Any recommendations would be helpful of a company or a person you've used?

Costin I. · Answer

@Jami Vincent - not a lawyer, not legal advice, so take it with a big spoon of salt, and all due diligence required, but here is my 2¢: Do you have a lot of equity and/or cashflow in these 2 investment properties? Or do you operate in a litigious profession (e.g. doctor)? Are these properties free and clear of mortgage (a note in itself is a form of asset protection if there is little equity)? Do you really need the complications and costs that come with LLCs? If you are new to REI you should be primarily concerned with finding good deals and growing your business first. I would not suggest to look into establishing LLCs and complicated asset protection strategies till you have at least $100-300K in equity(!) and only after you covered properly the "other" aspects of risk management (insurance, umbrella insurance, proper property management, etc.). Read this book first - https://www.amazon.com/Every-Landlords-Property-Protection-Guide/dp/1413307000 - before getting into more complicated and expensive measures of protection.On the anonymity aspect, the key word is "easily" -land trusts and Wyoming structures will hide you from public searches (someone doing a basic search online). But you likely already left a paper trail behind you (in your already acquired properties, through recorded deeds and mortgage notes) and continue to leave a trail with your operations (payment of taxes, insurance, leases, etc.) - so unless you have a lawyer acting as a proxy and signing all the documents for you from the beginning and throughout, your anonymity is relative. Plus, if you get in a lawsuit and it reaches the discovery phase (as in not outright dismissed), all that comes to surface. Remember, it works by minimizing the target on your back (through the anonymity part, making it difficult to find out what else you own, how much of a juicy target you are) and by making it difficult to, and limiting what to collect in the case of a loss (the LLC part), but otherwise, asset protection is not foolproof, nor is one time deal, you don't put it in place and don't have to worry about anything else. AFAIK, AC payment structure is an "introductory one" - have you looked into what they require on an annual basis to maintain your relationship with them? Also, they are not promoting the Series-LLC, since that cuts them off after initial setup, and they can't milk you with an LLC for each property. And since you are in CA, I hear Delaware Statutory Trust (DST) are the recommended way to go. Here is my Asset Protection Decision Diagram - to help assess the need for asset protection, and what to implement : https://www.biggerpockets.com/files/user/CosIorg/file/asset-protection-decision-diagram Here is my Asset Protection Onion Diagram - what, when and at what cost one should implement in terms of asset protection - https://www.biggerpockets.com/files/user/CosIorg/file/asset-protection-onion-diagram-v2 Again, just my 2¢. For specialized advice, my recommendation: @Scott Smith.

Jason Andler · Answer

@Jami VincentI don't really have much to add from what everyone else said, I am just curious as to why you want to be 'invisible'.My understanding is that laws are there to protect people. You have a relatively small portfolio and as long as you are addressing issues as they come up then you are doing what you are supposed to do. Keep the properties in good condition and keep good tenants.I personally have a couple properties in my name a couple in an LLC and a good umbrella insurance policy.

Jami Vincent · Answer

Thank you Drew!

Jami Vincent · Answer

Thanks Zev. I'll be messaging you.

Jami Vincent · Answer

Drew Sygit · Answer

They're charging a premium for their marketing, not really for their expertise. A LOT of attorneys do that and try to convince you they do special/custom forms for you.The reality it that it's usually boilerplate forms that they just "fill in" the blanks on for your specific name, address, etc.

J Zev J. · Answer

@Jami Vincent - I'm not an attorney either but I can recommend a company that is good with setting up an affordable anonymous LLC structure. You'll still want to compare that to the protection provided by a trust but it's probably worth researching different options. Please message me if you want more information.