In real estate investing, protecting your assets is very important. If you don't have assets, then you need not worry about anything and you can be safe. If you have assets, then you must buy good insurance to protect it.
As an investor, you can easily focus on the deals and the numbers about the properties. People might think that a real estate investor will have a lot of assets and plenty of cash but its not necessary that you must have a lot of cash while you start investing in real estate. Once you start capturing deals you'll get that confidence and start earning money.
Within a short time you can reach heights with your work, effort and knowledge. Protect in your assets might be boring because it involves having conversations with professionals who won't even have time to talk with you. Its as boring as talking with a doctor.
There are various concerns in protecting your assets. They are
- Liability
- Tax Strategies
- Estate Planning
All three have unique strategies but they don't compliment each other. If you look for the simplest tax strategy, then it might not be the best for asset protection. On the other hand, if you devise an aggressive plan then it might be worse your tax situation. In order to avoid these, take the title to a land trust which simply hides the beneficiary details from the public record. This might not cost you extra.
Use “Single Member, Manager Managed LLC” which exists only for liability purposes and not for tax purposes.
Multi member LLCs are not good because they make you file another tax return which inturn results in more expenses.
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