In this episode, you’ll hear:
- 01:32 – Why more properties don’t mean more risk
- 01:32 – The reasons why asset protection doesn’t work retroactively
- 05:11 – Why legal can actually be MORE expensive down the line
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Why more properties don’t mean more risk
Just because you have less to lose doesn’t mean you can’t lose. Small doesn’t mean less risk. Larger is in some ways easier because you have the cushion, many smaller real estate investors are relying on every rent payment to come through
While statistically, that might be true because more properties mean more tenants, more contractors, and more land. It’s also not true because each property carries an amount of risk for all the same types of problems. There are not suddenly new or different types or more dangerous problems when you leapfrog from 1 property to 10 properties. The risks remain the same.
Why asset protection doesn’t work retroactively
Asset protection tools for real estate investors are only effective from the moment you put them in place but lawsuits are effective from the moment the incident happened, not when the lawsuit gets served.
Think about it… You can’t put insurance in place today and have it cover something that happened yesterday. Even if you get sued for it in a year! Yea that’s right, the counting of time starts from the incident not when the lawsuit happens.
That’s why it’s important to implement both offensive and defensive asset protection strategies in your business as soon as possible.
Why Asset Protection Can Actually be MORE Expensive Later
Legal should help you clean up your operations and increase your bottom line. It’s the easiest way to make more money in your business instantly. When you put off the legal clean-up, you may have years of wasted money.
The ideal situation is to title property how you intend to keep it from the get-go. Why? Well, you might end up paying thousands of dollars in transfer tax to move the properties into an entity later. Many states charge a transfer tax for these types of transfers.
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Resources Discussed in This Episode
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