Getting out of rentals to avoid liability?

[Jack B.]

Real estate, leveraged real estate, especially bought at the bottom of the market in a high equity growth area, can make one very wealthy very quickly. I made most of my money in my career, but a significant amount in real estate as well in the past five years which have been good to stock and real estate markets alike.

That said, once you've made your money, and the Cash on Cash returns drop to the point that you can get the same return (as a result of property appreciation) or nearly the same return in a REIT index fund, wouldn't that be better? Less risk, more diversification, same returns, and much much less exposure to liability.

I'm not one of these people who thinks it won't happen to him. I was sued once for a car accident that wasn't even my fault. While everyone told the truth on the scene, the guy who rear ended me with an 18 wheeler and pushed me into the car in front of me changed his tune after the fact. The person in front of me sued me AND him, claiming I hit them first, then he hit me into them again. It turned into a 2 YEAR legal battle. My insurance company refused to pay them anything which is why I got served with a lawsuit instead. My insurance company said it was extremely obvious that they were lying as their stories constantly changed. 

They even told me in 2 years the only story that never changed was mine. There was damage to either one of their vehicles an SUV and a Semi Truck, since my car was plastic and they had solid steel bumpers on both of them. My car however, was trashed, crushed like a pop can and I was in the hospital. They walked away with no injuries or damage to their vehicles, then deny fault/sue me. Yep...

Luckily the Cop who did the report remembered the accident and between that and the police report, along with the guy who hit me agreeing to come clean if I signed an affidavit for him because she was starting to make up stories about him coming out of his truck and physically attacking her! Not aggravated enough yet? She was an illegal immigrant with no drivers license, and she got to sue me and the guy who rear ended me. In the end it thousands in attorneys fees for my insurance company. I ended up getting a settlement from the guy who hit me and the suit against me was dismissed while it continued with against him.

I worry that being in real estate exposes me to too much liability. It's too easy for someone to take your money over some frivolous thing, all aided by the liberal justice system (take from those who earned it and give it to those who didn't, for BS things). Think I'm wrong? My friends mom borrowed a ladder from her neighbor. She fell off the ladder climbing on the roof and sued her neighbor, winning a 250K settlement. It's that easy folks...I can't imagine all the ways a tenant can "slip and fall" and get a large payout...