Asset protection without an llc

[Ari Bachrach]

Because asset protection is a high priority for me I've kept everything I've done until now in an llc. However I've been thinking about financing, and the very cheap and long term fannie/freddie loans are enticing. To get them though, it seems I have to keep the property in my personal name. If I do this, what are some other asset protection strategies I can employ to limit my personal legal liability?

[Scott Smith]

Originally posted by @Ari Bachrach:

Because asset protection is a high priority for me I've kept everything I've done until now in an llc. However I've been thinking about financing, and the very cheap and long term fannie/freddie loans are enticing. To get them though, it seems I have to keep the property in my personal name. If I do this, what are some other asset protection strategies I can employ to limit my personal legal liability?

 Hey Ari,

Great to see you are growing and expanding your portfolio! The fannie/freddie loans are changing by their structure to be more LLC friendly, but due to how much they are changing I still don't like relying on that alone. The best strategy I have seen to utilize these types of financing is through the use of a land trust. While you can trigger the due on sale clause if you purchase a property into your personal name and transfer them into an LLC, you do not trigger the same red flags by transferring the property into a land trust. The reason for this is because the land trust is considered an estate planning tool and is exempted transfer from the DOS clause thanks to the St Germain Act. After transferring the property to the land trust you would assign the LLC as the beneficiary to ensure it remains protected. This article goes over the process a bit more.