How to shield my paid for personal residence

[Eric Nelson]

Hello, I have a question about shielding my personal residence. Quick background, I have a paid for house and my wife and I have saved enough cash on the side to get into the brrr game. Still very new and learning. I've started an LLC, maybe prematurely, thinking I'd be able to somehow keep a mortgaged rental in it to shield my personal assets. After some reading on bp I'm now aware that it isn't that simple, can't get a personal mortgage then transfer it without the bank likely calling the loan due. So, that said I had another idea. Could I keep the rental property in my own name then transfer my personal residence to an LLC thus creating a gap? Do nothing else with the LLC, just leave my house there, call it an investment or something. What about some sort of trust?

[David Faulkner]

I agree that an umbrella policy is likely the best way for the level of asset protection you need at this time. You can also take out a HELOC on your primary residence. Any lawyer that starts poking around will see that there is a HELOC and it is not a free and clear property ... they would need to dig much further in order to determine the amount owed on the HELOC, even if the balance is zero. They are inexpensive to setup, you only pay interest on the amount you take out, and it is also a great way to fund flips and brrrs all cash on short notice without paying hard money points and interest. When you sell the flip or refinance the brrrr onto inexpensive long term fixed interest debt, then you use the proceeds to pay down/off the HELOC and repeat. The HELOC should be good for 10 years or so keeping it open to use or not use as you please, and then you can likely extend it or convert it to long term mortgage if at that time it has a non-zero balance.