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Updated almost 2 years ago on . Most recent reply

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Michael Shadow
  • Investor
  • Bellefonte, PA
86
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Asset Protection

Michael Shadow
  • Investor
  • Bellefonte, PA
Posted

Just looking for other peoples thoughts on what is the best way to protect your assets. I've heard so many different strategies it's hard to try and figure out which way to protect yourself. How do you have set yours up?

Putting all the properties in individual LLC's sounds like a pita, not to mention that it sounds like it would start to get quite expensive come tax time, why having your accountant prepare 40 different returns for your 40 different LLC's just doesn't sound practical to me. Then you have to pay corporate stock tax on top of all that (a PA law, maybe others).

I've also heard own the properties in your own name and set up a C Corp to lease the properties to and have it manage them for you.

Just get an Umbrella policy.

Trust Deed them to someone you really trust (who's not family) and set it up so they can do nothing with the property with out your permission.

Ugh... the list goes on and on

What have you done to protect your assets?

Most Popular Reply

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Michael Rossi
  • Real Estate Investor
  • Ohio
1,171
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4,583
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Michael Rossi
  • Real Estate Investor
  • Ohio
Replied

UrbanInvestors,

I buy all my properties in LLC's. I do not buy them personally and then quitclaim them to a LLC. I sign a personal guarantee for all the properties even though they are in the LLCs. Almost all of my loans are commercial loans through small local banks. Single member LLCs are dangerous from an asset protection perspective. According to Pat Tarr, one of the leading asset protection lawyers in the US, recent court cases have pierced the LLC on the basis that they are just an alter-ego of the individual. She strongly recommends that all LLCs should be at least two members (like you and your wife).

I get the insurance in the name of the LLC with my wife and I listed as additional insured.

Mike

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