Epic Real Estate Investing - Ninja Asset Protection for Multiple Properties | 363

Episode Date: March 27, 2018

Tax Hacker Tuesday is back to teach you ninja asset protection for multiple properties! Tim Berry explains the dual LLC strategy and walks listeners through a step-by-step process to protect your equity (without having tens of LLCs to keep track of). Learn it all with Epic Real Estate and Tim Berry on Tax Hacker Tuesday! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Did you know that up to 50% of your lifetime income will be wiped out by taxes? What if you could stop this madness? Isn't it about time you play on a level playing field with the wealthiest 1%? Now you can. Tim Berry, attorney at law, shares here each and every week current tactics and strategies that anyone can implement to hack the tax code. Protect your assets and keep what's rightfully yours.

It's time for Tax Hacker Tuesday. Well, there's so many people who I've met that, gosh, they have five houses, they have 10 houses, they have 20 houses. And for some reason, they feel like they have to have a separate LLC for each property. And I know why they feel that way. Somebody's told them, oh my gosh, if you have all 10 properties inside one LLC, and now that LLC gets hit with a lawsuit, you're going to lose all the equity inside there. Well, if you're doing things wrong, that's absolutely correct. You will lose all the equity. But there's a very simple strategy where you can protect yourself from losing all the equity

if you put all the properties inside one LLC. And what is that strategy? That strategy is the dual LLC strategy. For the most part, all you need is two LLCs. Even if you have 500 properties, just the use of two LLCs is going to give you some pretty darn strong asset protection. And stop and think about that, by the way. If right now you're running with four or five LLCs,

between me and you, you know it's an accounting nightmare. It's a hassle to keep up with everything on that. And so if we can knock that down to two LLCs, what do you think? Is that going to make your life easier? Yeah, probably. Okay, let's go into the strategy. This is what you do. Whenever you acquire any real estate,

whenever you're going to be buying and holding that real estate, go ahead and acquire it in LLC number one. So if you have five properties, they're all in the name of LLC number one. If you have 50 properties, they're all in the name of LLC number one. If you have 5,000 properties, they're all in the name of LLC number one. Then what you do is you set up the second LLC. And as soon as you acquire any property in LLC number one, what you do is you sell an option on that property over to LLC number two.

LLC number two. So LLC number two is sitting off on the sidelines. It's not doing anything. And since it does nothing, it's not going to be incurring liability. But LLC number two, via the option, is going to be controlling the equity inside LLC number one. So LLC number one, it's running and it's doing all sorts of real estate deals. And now let's say somebody hits LLC number one with a massive lawsuit. It's a $500 gazillion dollar lawsuit. And it's a $500,000. and they actually win that lawsuit, and they start going after the assets inside LLC number one. What happens?

LLC number two over here, it has options on all of the equity. It controls all of the equity inside LLC number one. And these are all pre-existing, and they've all been filed with the county recorder's office. So if you will, think of them as a first mortgage, a second mortgage, and the judgment against LLC number one is a third or fourth. fourth mortgage. In short, LLC number two has lien priority. It can suck out all the equity and all

the equity is now protected inside LLC number two. That is not a part of the lawsuit. That's it for today as we dream of a tax system that works just for you. But until then, you have Tim Berry. See you next Tuesday for another episode of Tax Hacker Tuesday. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.