All Forum Posts by: Bobby Casey

LOL, more than you probably want.

In all seriousness, this type of planning can be done for someone with just a rental house or 2 and also someone with millions in shopping centers.

It isn't that complicated to manage if done properly, but the perception is that it is complex and most people just shy away from it.

Then they get sued and lose big and realize, 'maybe I should have done that.'

This type of planning is akin to insurance. You do it hoping you never need it.

Bryan,
The methods are as limited as your creativity. With various trusts, LLC's, LP's, offshore entities, insurance policies, etc. the options are endless.

For example, you could place each of your RE holdings in its own separate LLC. The form another LLC to take out a lien against each property, thus stripping all equity. Each LLC could then be owned by a hybrid asset protection trust with your living trust as your beneficiary.

Maybe if you had a specific question I could answer that.

A common tactic is to put the property in a land trust and name your LLC as beneficiary.

You can also transfer the property into an LLC or an LP.

I agree that this takes a lot of sophisticated planning. I generalized a lot, but this is very complex and only feasible for certain people.

However, from a cost perspective, it is much more cost effective than normal US based policies when you consider the tax savings that are possible.

The only life insurance I would view as a good investment is offshore private placement life insurance (PPLI).

The cost of insurance in a regular whole life destroys the policy value over time, plus your investment options are not very good.

You are limited to what the insurance company sells, which rarely can even match the overall market.

PPLI's give you huge amounts of freedom allowing you to invest in anything (except for US real estate, unfortunately).

You can even buy your own company shares, offshore real estate, equities, bonds, or even cattle if you wish.

No capital gains tax, no income tax, and no estate tax if properly structured. You can even take policy loans tax free.

But US life insurance products are mostly worthless. Term life is a good cheap option to protect your family in the event of your demise, but it is not a savings vehicle no more than your car insurance is.

There are many ways to protect your assets legally. With various entities, both domestic and offshore as well as trusts, you can create a veil of privacy that is legal, but still untouchable.

On a very basic level, you can put all of your assets in various LLC's that are owned by an offshore trust.

If you are sued, you must disclose your income to the courts, but that doesn't mean the assets can be attached.

I recommend to all clients with a reasonable net worth to establish and offshore entity (like and LLC or IBC) and a bank account. This at least gives you options to move money around if necessary.

And yes, it is perfectly legal.

Understood. This was merely an example to illustrate the opportunity cost. Either you use it to pay down the debt at 5.75%/year or earn interest at 5.75%/year.

Either way, if you don't take the cash, there is lost opportunity.

Honestly, if it were me I would take the investment job route. If you can truly live frugally, then you should be able to save $5-10k per year at your job, maybe more.

But even more importantly, you will gain a huge amount of business experience by working in that environment. You will learn about all different types of businesses and how to determine their value. This can be a great experience.

There is nothing preventing you from getting involved in RE investing in the evenings and on weekends while you maintain the full time job. As they say, "from 8-5 you make a living, from 5-12 you make a life."

Take your landlord up on the offer to be mentored. Spend as much time with him as possible after work and on weekends. As you are building your bankroll from your job, you will be learning about investing in RE too.

After a couple of years, you will have some money to put down on an investment property or 2. As long as you manage your cash well, you will be able to transition full time into RE investor without having to live on ramen noodles and mac and cheese.

I am a firm believer in goal setting. Over the years I have developed my own personal method for goal setting that seems to work well for me.

Each year around the end of December or first of January I take a short trip by myself. Sometimes it is just a camping trip, sometimes I fly to a new location and stay in a hotel. The new location and lack of local distractions helps me 'get away' and focus and the task.

Once on site, I set my daily schedule to allow for time to work on the goals and time to get out and see the new area. Seeing a new area always helps invigorate the mind and possibly see new opportunities.

During my 'work time' I begin by brainstorming the things I like to do and things I don't like to do (basically a pro/con list) in each of 4 categories; personal, professional, family and financial.

Once I have a pro/con list in each category, I go through them one at a time to decide what are some things I want to accomplish in the next 12 months. I generally only set goals for one year out. I do have a few big long range goals, but mostly I have found it too difficult to focus on something 3 years from now.

Once I create a list of things I want to accomplish for each of the 4 categories, I then go back and rate them in order of importance to me. I take the top 3-5 in each category and write them in my journal. This journal stays with me at all times and I reread them at least once per week.

I also have a few people that also go through the same process (or similar) for goal setting and we track each others goals in a google doc spreadsheet. We have a conference call once per month to discuss goal achievement and other issues. Each person keeps track of their progress in the spreadsheet and briefly discusses their goals with the group. This accountability helps keep everyone on track.

I hope this helps.

I would take the cash personally.

Look at this. If you invest the $7k at 10% for 6 months (obvioiusly an arbitrary figure, but certainly possible), then you end up with $7341.66 or $1223.61/month.

This covers your cost plus a little. And you get a guaranteed upfront payment. You eliminate the necessity of collection payments and the hassles that entails.

Also consider, how long are you going to sit on this house waiting for an extra $100/month? If it takes one more month to find a tenant, you are obligated for the $1175 in monthly costs.

So if you wait one month to find a tenant for an extra $200/month it will take you 6 months to recover the loss.

As my dad used to always tell me, "a quick nickel is always better than a slow dime."