All Forum Posts by: Mary Browder

@Matthew McNeil I have not, but do know the fresh hell of hitting "unsubscribe" a million times. I swear GlassDoor is still sending me emails for a job hunt I went on in 2012. I have to unsubscribe from EVERY SINGLE SEARCH TERM I ever ran, and a whole bunch I didn't. Until I learned the beauty of filtering, I considered deleting that email account.

I did subscribe to my own thing I recommended and so far zero spam. i'm not signed up for anything else from where I work and I'm pretty sure it's actually over now that the whole deal is live. :) Guess I'll have to add that to the ever-growing "to-do list" of ted talks.

@Jay Hinrichs Those smart attorneys have yet to figure out a consistently effective way to get the job done. With enough preparation, you can anticipate every move. Those who really value their anonymity use private legal docs to designate a second person to sign for them. Similarly, the shell company is the one doing business with the public, and you can employ anyone to do that; it doesn't have to be you. That said, your set-up sounds ideal for your situation, and that's awesome and the greater lesson of your post (for me, at least). You hit on one of the single biggest misconceptions about asset protection, whether you meant to or not.

Your post makes a great point that asset protection isn't one-size-fits-all. Liability sounds like enough for your situation and circumstances. But that's not the situation of MOST real estate investors. Most investors--that I encounter at least, and my job means I'm encountering lots of them in specific situations--own or plan to own a rental property, for instance. So I try to be careful not to speak in absolutes, because what works for you won't necessarily work for another investor. Someone with no rentals but a high risk career should be fine with just that first-line of defense insurance, but that wouldn't cut it for the apartment complex owner or investor hoping to grab up 8 properties by the end of the year. We're all unique, and that's why a qualified AP attorney/pro will take your individual circumstances into account before making recommendations. 

I don't know most of the people on BP and have heard one story of overkill, but have seen far too many cases of failure to prepare at work. When someone comes to us because their litigation nightmare has begun, it's a little late! The law favors the proactive in most areas, but especially real estate/landlord-tenant/asset protection. Thanks for your thoughtful comment!

@Jay Hinrichs Actually, there are several things asset protection attorneys and professionals can do to prevent this "alter-ego" problem. 

First is structuring the entity properly. Traditional LLCs are much more likely to be "pierced" because of pooled assets. SLLCs are slightly more secure and there's very little case law on them precisely because they are tough to fight. Setting up entity properly means not going it alone--your lawyer is the one who can help you make decisions about whether you want a single- or multi-member, whether passing through for taxes is in your best interest, etc.

Second is utilizing it properly--which means it's a good idea to check with your attorney before transferring anything into or out of the SLLC structure.

Third is securing your anonymity. We like to do this with a Land Trust, and have written about this process of disguising company ownership before here on BP. What you might not be aware of yet is that you can actually pair a Land Trust WITH a SLLC to completely remove you (as an individual) from the picture. The Anonymous Trust will be listed on state filings. Trusts are three-part documents that, if structured correctly, will be filed privately. Names aren't under obligation to be reported to the state. So if someone comes to sue you, they will see the property is owned by Series (A,B,C,whatever) and that the structure is owned by XYZ Trust. Your anonymity is vital, and land trusts can also protect you and your investments from identity thieves. 

Finally, you have to do your part to maintain these structures. That means not co-mingling operations and assets. The companies that hold your assets (Series in the case of the SLLC) should NEVER do business with the public. That's your shell company's job. In fact, if someone comes after you, the shell company is the fall guy. That's the one we want them to sue, because it owns nothing. 

I hope that has helped clarify some of your concerns.

Hey @Matthew McNeil! Legal writer in the AP field here. I work for @Scott Smith and can tell you we have an asset protection crash course and a couple of webinars that could be useful resources for you. What would help you out most? With the boss-man's permission, I'd be happy to share a simple diagram that shows how some of these basics work. You can also check out Scott's many articles on the subject here on BP. We've answered a LOT of the recurring questions, but are also working on some things to hit on the most frequently asked so investors can get a clearer "big picture" of how these legal tools protect your assets.

P.S. @Costin I. has had a sneak peek at the e-course, but I'd have to get permission from the family to share that resource and wouldn't want to violate Self-Promo rules. The diagram he shared may actually be one of ours, but if it isn't, I can tell you that it IS accurate. I'll bug Scott to get back to you today--it's hard for him to see things he isn't tagged on. Have a great weekend man!

@Stevie Delacruz Well, I'm not in college anymore. Graduated at 20 years old. Can't say that investment is still paying off--I got out of the stock game because of an intuition that it wouldn't last. Big believer in quitting while ahead, for better or for worse. I'm actually the worst person to gamble with. I infuriated my mother on a cruise ship once because she gave me a few hundred bucks to spend at the casino...I played two rounds of three-card, won, and walked away! Haha.

If you're in college, you have TONS of networking opportunities. I'd also recommend checking out local meet-ups and connecting with investors in your community. Being here on BP is a great start though! As for information, one of the things that's part of the learning process is figuring out how to vet information sources. Be aware that everyone has their biases, and that can be based off of all sorts of things from background to professional experience to simply what has worked for them. What works for one investor may not work for another, but it's all good stuff to take in. The BiggerPockets blog is a great starting point as well for just hearing from many different kinds of experts and investors. I believe a piece from one of my colleagues is on the front page today.

@Stevie Delacruz No such thing as too young. I made my first investment (non RE) at age 8 (1998). It was wish $500 gifted to my by my grandfather, who had stock market experience and oversaw the whole thing/facilitated buys and sales. After a year of paper trading, he decided to fund me with that. I was able to make an absurd amount of money by swing trading and doing a ****-load of research an i niche, highly unusual asset class (a company that effectively had a monopoly on oddly-shaped foam pieces/packaging for computer hardware during the PC boom).

I was 8 and didn't know any better, so got out at 9 and saved it all. The only reason this worked though? That there was a more seasoned investor (my grandpa) watching my back, and it was money he could afford to lose. You can get started today by getting an education--being here is a great start--and networking like crazy while you explore your options. Maybe you can find something small that you can afford to lose in a worst-case-scenario. Run that, and the worst-case scenario, and the numbers, by a more seasoned investor with experience and documented success in the asset class. You've got nothing but time to strategize. There will be many good deals, but if I were you, I'd focus on building the education and network pieces right now, rather than hunting actively for a first deal.

That said, it's awesome to see another very young person considering RE. Sending you a request to connect. It'll be interesting to see where you go!

This sounds like a tricky situation. Was your tenant aware of this policy when he moved in? It's hard to tell from your post when the insurance policy kicked in.

Most people would probably be hesitant to get rid of their pets. Talk with your tenant about the situation, for sure, but be aware that the insurance company has its reasons for their policy too. Pitbulls tend to have both lovers and haters with few folks in between. But as a landlord, you may want to bone up on your liability issues around your tenants' dogs. There's no such thing as too much information. Keep us posted, and I hope this situation resolves well for you.