All Forum Posts by: Mike S.

I would highly recommend to check the YouTube channel of Clint Coons, one of the Anderson advisor funding partner.

There are hours of excellent deep dive into asset protection topics for real estate investors.

The more you learn before hand about the subject, the most you will get from any law firm you hire to help you set up your structure.

See in this video from Clint Coons some good strategies for California resident regarding real estate asset protection.

That's the way I set up my structure.

One WY holding LLC for the great WY charging order protection and anonymity, and each property is owned by a local single member LLC in the state where it resides. These local LLC have for single member the WY holding LLC.

That way all tax reporting is centralized into the WY holding LLC, and I have charging order for all my properties. Also as each property is in its own LLC, my maximum exposure is only one property.

Look at having a different entity for your STR as it could become an active business. Also the liability risk is probably higher.

You may want to create one entity who owns the property, and then create a master lease to your STR operating company that will be a different entity. You can then decide what will be active vs passive income. Your STR operating company could be taxed as an S corp, while the entity holding your property could be disregarded or a partnership.

Check with your accountant AND attorney what would be the best structure that will provide asset protection and tax optimization.

I would suggest you watch this video from Clint Coons about short term rentals structure that can educate you on the subject.

Using a management entity, especially taxed as Corp and not a disregarded LLC can give you some interesting tax benefit: You can use an accountable reimbursement plan, create a solo 401k, deduct investment expenses, etc...

But it has a cost too (entity legal fee, tax return, etc...).

My personal structure is similar, with a C-corp as my management entity, and a holding partnership LLC for all my investments. The C-Corp is a 1% member of the holding.

Some banks will do LOC on investment properties. For these lines, most will have no issue with the property being titled to an LLC. Some however will want a disregarded LLC, while other will have no problem with partnership LLC or Corp.

You need to shop around as each bank has its own requirement and that can change with time.

A few years ago when I was looking at a LOC for one of my property, I made a list of over 50 credit unions, local and regional banks and major banks in my area and made a spreadsheet of all their LOC products. At the end I found maybe less than 10 that were offering LOC for investment property.

Articles of incorporation are for ... corporations, not LLC.

What, there are guns in California ?

I can't even imagine all the environmental restrictions that you may have there. Probably no lead ammo, site cleaning and aquifer protection...

I am using IUL to funnel all my cash flow, and use it as collateral for loans to reinvest in real estate.

Liquid, safe, tax free, asset protected and a good life insurance for my family and estate planning purpose.

Like most of the people who discovered max overfunded cash value life insurance, I wish I knew about them a few decades ago... I can't even imagine where I would be today if I had started to use these products when I was younger.

I am not sure about all the CA specificities, but have a look also at land trust. The transfer of beneficial interest is a private non recorded transaction.