There are several steps involved in the success ladder of real estate investing, but even just lightly overlooking one specific rung can completely derail an investor’s triumphs: Asset Protection. Real estate is prime meat for lawsuit predators given its high holdings value and an easy award for damages. A true Real Estate Baller will protect themselves with tailored strategies on each of their assets. Are you and your business safe from these property predators?
The intent of Asset Protection is to guard your wealth over the lifetime of your investing career. A good plan not only reduces your chances of becoming a lawsuit target, but you can also cover yourself where your insurance may be lacking. And if you happen to get served, having a plan in place can help ensure the highest preservation of your life’s work. Don’t become a vulnerable dollar sign where you can lose it all, (even including your personal wealth!) Strap your investor belt with the right strategy and educate yourself with proper planning techniques. REBallers is here to introduce you to the right people, organizations and networks. For now, let’s cover the basics. We’ll bring you more at our February meetup, or you can reach out directly to REBallers partners Anderson Advisors, who hold regular workshops in the Central Texas area.
Let’s talk insurance. The obvious statement is the best way to win a lawsuit is to completely AVOID one. How do you do this? Start with the right coverage. How well are you insuring your property/properties? Fire, weather, injury, vandalism… all of this can literally destroy and demolish those commas in your bank account to the point of bankruptcy and beyond. Sitting down with an insurance pro or consultant is a time and money investment you need to make. We make it our mission to get you in the same room with the best ones in Austin if you attend our meetups regularly and in February, we bring you experts with over 215 combined experience on the subject.
A good foundation is critical to building a sturdy, lasting home. Why wouldn’t you do the same for your business? Does your real estate stand on a good business foundation? Hopefully your holdings aren’t under your personal name, otherwise, you put all of your personal wealth, even your retirement, at risk of being ROBBED by a lawsuit judgment. The best way to lock up your assets is to structure them into a proper business entity. The standard entity for real estate is LLC or Limited Liability Corporation. There are profit and loss tax benefits, recordkeeping flexibility, and protection of personal wealth, meaning only the assets of the LLC can be claimed for damages in the case of a lawsuit. If you own multiple properties and/or have multiple assets, don’t put all your eggs in one basket! Why lose it all with one LLC when you can segregate your holdings and risk only one egg as a precaution. There are various ways to structure the LLC and each investor needs a tailored plan, so speaking with an expert legal advisor on the subject is recommended.
As a real estate investor, you should know the liability risks you face as a property owner. From there, you can take the proper steps to guard yourself against potential damage.