@Katie Balatbat
Thank you so much for taking the time to write such a thorough and thoughtful reply to my post. Though I must admit I don't yet fully understand, this has brought a lot of things to light for me. I really appreciate your input and please know I am just a beginner in the space and very open to options.
To answer your initial question, I feel I should explain what got us here:
To bring more clarity, we are located and own in CA. I do all I can to ensure the properties are as safe and well maintained as possible, however, we obtained mortgages in our names. I always have the worry in the back of my mind given the typical property values and being such a litigious state in general. We are also in the business of Short Term Rentals so that is another layer of risk. However, setting up an entity for each property in CA LLC would be insanely costly to start and upkeep. This is not to mention the DOS clause when transferring to an LLC.
I started doing some research, and I think this is where the Analysis Paralysis began. I attended a workshop hosted by a large business advisors firm. I was over the moon to hear about what they were doing for their clients. Using a WY statutory trust for each property, they said we would be able to keep our anonymity and have a layer of protection that would not spill over to other properties. Not only that, but because the property is being transferred to a trust, lenders typically look at it like Estate Planning, which solves the DOS dilemma.
In my particular case, it was recommended I get a WY Statutory Trust for each property and then have a separate CA management LLC for our STR's that would rent from these Trusts in lease agreement/rental arbitrage situation.
I usually just trust the professionals, as I know you've studied and practiced this for many years, and I'm just entering the space. Just as I was about to sign up, I decided to take a quick look at their reviews. Unfortunately, I was alarmed at the number of BBB complaints they had. One specifically calling out that the WY Trust idea did not offer the protection they thought. I was told it would act as an LLC in case anything happened! I can't help but wonder if this was a hole in the plan, or perhaps that client had not followed instructions or something.
I know that people are more likely to write bad reviews than good, so usually I'd take it with a grain of salt but it got me worried. Either way, we really liked the idea of WY entities at this point for the Anonymity factor alone, but the lower fees and charging order protections they offer were really attractive as well.
From all that you've explained, it seems this might not be the best plan or simply too complicated.. but I'm unsure where to turn or what to do next because I was really excited about the idea. It sounds like we would end up paying more in LLC fees as well as losing our anonymity anyway.
Again, I really appreciate your input and am keeping all of this in mind. If you have availability, I would love for the chance to connect. I see a lot of people on these forums highly recommending your services - and I can already tell it's for great reason! :)
