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!
What You Will Learn About Ninja Asset Protection for Multiple Properties:
- How to keep all your properties inside one LLC without risking losing all your equity
- What the dual LLC strategy is and how it can protect you
- The step-by-step process to implement the dual LLC strategy into your properties
- How to make your life easier while owning multiple properties
- What to do if someone hits you with a lawsuit and comes for your multiple properties
- It’s been great meeting you virtually. Would you like to meet in person? Our next live event is right around the corner! Go to EpicIntensive.com for the details.
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- Need time? Work on your business rather than in your business by leveraging the time of others. Access free information and find real estate-trained virtual assistants to help you free up your time. Learn more at VAsForRealEstate.com.
- Need training? The ultimate training environment for real estate investors: Version 3.0 of The Epic Pro Academy! New look, new lessons & new content – we’ve got everything you need to know to get your first paycheck!
- Need someone to do it all for you? If you’re an Accredited Investor, you can diversify your portfolio by hitching your wagon to our train and share in the profits. Go to EpicWealthFund.com to download the executive summary.
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Speaker 1: This is Theriault 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.
Tim Berry: 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 them”. 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, five LLCs, between me and you, you know it’s an accounting nightmare. It’s a hassle to keep up with everything on that.
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. 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 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, vis the option, is going to be controlling the equity inside LLC number one.
LLC number one, it’s running and gunning. 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 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 were all been filed with the county recorder’s office. 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 mortgage. In short, LLC number two has lien priority. It can suck up all the equity and all the equity is now protected inside LLC number two. That is not a part of the lawsuit.
Speaker 1: 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.