Protecting your assets - Deal structure, Financing & Legal

[Marija Petrovic]

Hi everyone! newbie investor here with few properties in my portfolio. As my portfolio grows I am strating to think about all possible ways to protect my assets and myself from all liabilities. 

I have properties that have conventional mortgage, prroperties financed and with partner (this one is under LLC) , properties under my personal name (paid cash), properties with seller financing (under my personal name)

I am thinking what is the best way to protect myself and my assets in all scenarios? and is there anything you can recomend for me moving forward? should I contact a real estate attorney and discuss this with him/her?

[Olia Fogel]

If you are a CA resident, then I would recommend looking into a Delaware Statutory Trust (DST). It has a parent-child structure to separate assets into secure series, similar to a Series LLC, extending liability protections to real estate investments within the structure.

It's generally best to have each major asset inside its own company. So if you own, say, five properties, you will have your parent DST as well as five series beneath it.The ability to shelter assets inside of individual Series offers investors a high degree of protection.

Additionally, DSTs don’t have to pay the $800 annual Franchise Tax owed by LLCs and Series LLCs.