All Forum Posts by: Kevin Blakey

His book describes forms of asset protection on your primary residence. Does not protect against debts secured by a mortgage, deed of trust, tax liens, child support, mechanics liens and alimonies. Bankruptcies may have lower exemption rates. However, for business and personal loans, credit card debt, and accidents the homestead act can protect your equity.

Protections:

1. Insurance - the claim/court action my be an exemption under your policy;

2. Mortgage company is first lien holder;

3. Homestead Exemption can protect equity in house,varies state-to-state;

 Example:

Home Value $500K - mortgage $200K = $300K equity susceptible to creditors. Assume the home is located in Texas, Florida, Iowa, Kansas and Oklahoma which have an unlimited dollar value for protection (other states have $50K limit, some have none). If the home is located in Texas, all $300K of equity is protected; if located in a state with $50K limit, $250K is exposed. If named in a lawsuit and found negligent, the court could force the sale of the property to attempt to acquire the $250K equity.

I've been listening to Garrett Sutton's audiobook, "Loopholes of Real Estate". In it he discusses primary residence asset protection in the form of "Homestead Exemption" which varies by county. When I research this, the Homestead is a tax reduction for lower income or seniors, not an asset protection from creditors as he explains in his book. Does anyone have any insight on this?

I'm interested in taking the next steps toward building a RE investment portfolio. I have a duplex that I bought 6.5 years ago and haven't added any additional properties. I'd like to know who might be best suited to guide me through the pros/cons and advise me on a direction based off my current income and tax situation.