Asset Protection

Kandas and Larry discuss asset protection and answers to your questions.

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Welcome to brag radio which is all about being rich and generous. Every week your host Kansas and best selling author Larry goes to show you how to be rich and generous by investing in real estate. Broadcasting around the world on the black radio network from the flagship station W BT and beautiful uptown Charlotte. Your crier host the rock stars of real estate Larry and campus who. Hello hello hello how are you doing at Harry. And do an excellent it was actually really excited to be here. Another show an area. This is like one of the leaders he is one LA so number one so that he. When a long time yeah yeah we've been doing this quite awhile well a year and a half lead. Don't know what's going on juniors are armed and what we don't know that would be right. Act urged. Marty certainly here in the march Manning make that when he sixteenth. On the out years that no more than more than a year and a half between ethnic crazy. At the time time flies and haven't. And write it that's off the twelfth. So the show is all about bragging being rich and generous we teach you how to invest in old state. And in encourage you to go out and be a blessing to others brag be rich and general it's the second part. Of the bird who. Add part of the over. Look they. And yes we got a lot going on in rules they've got a lot of guys a lot of students out there making money and having fun and it's exciting. Here in Colin. It really is there really is. So well I've had a lot of people that have asked me about some. You know what do and do and can buy a house from my personal name anymore. What I have to do to setup an LLC universal than in the initial thought we might chat about that song today. About the asset protection aren't that the idea of them and about asset protection cleared area and you're out there. So there are a lot of different things of that for ways that you can do first of all. Real state district such rules committee rules state as a business. And we'll stay as an investment management and added that enters you into a three day from the united an illness. That put your hand in the right deal will be. I do. A phone number and an axis Kennedy and Madonna we're not trying Abdullah eighth where you go and let people write their phone number on her hand. That's not writing look at. Or I'm not left anti maverick left and it isn't that. If you don't you should and then right. And so thirteen inch and thirteen. And he still doesn't know what would hand. You rightly. We have this you make comments when we got a blunt if we have to sit on the same at a table because with a group of people. That it won't bother you were about Le ended. But the reports that forgot about that filming it for you guys are the only ones in their right mind. Yes you know apparently I apparently in this room. And it. Says and it was not a derogatory comment towards yet. With the grammys. The happiest today. When it today because it's quick wit. Is it is more. There and a violent and that is a little slow today we're going immediately quit only Marla immediately with the click it. It's and it's not trying to broaden it and so it's. It. New world over. A blue. Colors of Spain densely. And he he was almost earlier you'll take power and military power and had about a it for reining in the hour nap I love it love it and it's that I. Yeah. So a couple of people have asked me about certain entities stuff like that first of all. A what you got to know that. That basically if you're gonna be buying and selling properties Selma Selma. Fix and flip. Four by in wholesale price wholesale. Is where you on the property unit at a deep deep discount in the and you had a little bit of money might be 30050101000. Dollars. And then you sell it to basics and flip investor porcelain is gonna fix in and out right. So. Basically what you do it that's a business guy. So you need an entity for the that is a business all right and we can talk about how it needs to be taxed. But close it you probably you're probably went to tax that is an escort committee. Not as what's called passed. A pass through entity is what's called it disregarded it do for tax purposes. Because income flows through to your personal return. And who were probably a little. But. If it's a business it's probably need to secure tax advisor and futile one will be glad to help you can give Kansas a call. And in your shooter and email will be glad to put in the right direction. However. If you have a business it's probably more than likely going to be taxes. And and then you need and the key for investments. Now. And as you both noticed most people starting in most guys. That they won't. There won't Tuesday cash and cash flow but the problem is most people starting in rural state. They need cash right after. A year. Any cash now and the end after you after this and cash committee and then what you do is you have cash flow. Right in. And you know what you want about properties for long term right is about properties are slow and it's properties or to lease options whatever it is one right in the path and you have the most people getting in the rules state there are an awful. People and they're trying to do real state at home of that full. Sports supplement and so. They don't need another 500 dollars well what they need this by chip. Or 101000 dollars. Reported on the right now when we're selling properties and also is one of those businesses. I don't been fixed and flips we will talk about that in a minute. It's act in Korea right eight relationship no. So. With total selling weak probably an average of twelve to 151000. And and that's basically refuting paid. To negotiate the deep discount properties and that the business so much about it's no different in the field and being store. And you're buying in Victorian one crisis. Pars. Or if you're by an excellent course. Car analogy is probably Google's power they Dior. Does this gut. So you need an entity for that and you need to keep it separate mail. If you're gonna have investments. For a long term hold you also need to separate entity that now I can also be an LLC which stands for limited liability company and any. In the attorney. That the deals and corporations are entities and basically he says that if you don't know war and will be glad to refer you to several that we. We work with people who. No basis in the first instant. But I and they know realist. And know exactly what to do so. You also need an entity for your investments long term investment but it's gonna be setup a little bit different right. They need to have two different kinds of operating spoke. One as a business deal or. Right which is taxed one way and another one which is an investment it's probably going to be passed to that he has mentioned before. Which basically means. The income if you you're not gonna file tax return for that investment the it's going to flow through your personal return and that's were it's going to be picked up and pay taxes. As a mixture. Sure. It. So. But there's a lot of different types in did you cancel. And you know what I want it and then talk about some of those types it is an oil well seized one tactic that you can also setup. Of. Yale lab mr. Douglas you put your hand of duke plays seals numbers. And his security. Got a good soldier shot and it over there and camera but you're not going anywhere but out the that's funny. So there's LLC limited liability company and there's ways that you can actually title property you guys. And when we come back and go to each and every one level and the isn't that what you need to setup your own business right. But yes that majesty is started with a little bit more about who we are giving me a call 877 Larry go for your investor kit leaking as the digital version out here he now 877 Larry go shoot me an email to info at Bragg radio dot com we'll be right back. Right radio how about investing real estate should be read in dinners. Thanks for the thing that could happen. And they remain there from here little delayed. You took talk. So we're talking about is that he's right we weren't yet we're banking on. That you would hustle and Obama McCain put a woman last dolphins on the right. And so. Entities wouldn't talk a little bit about it well sees right. So their are LLC's limited liability companies and those percent. At at the secretary of state OK the secretary of state you can Google. Like North Carolina secretary of state herself to the secretary of state or Georgia secretary of state. And there are. At the secretary of state you can reserve an entity name. That's just to make sure that that name is available for you. When you set up your entity. And liked optics South Carolina is SE SOS dot com for South Carolina secretary of state. Right I believe that's their their website and it's kind of funny that I know that the coast we have supplement these but that's for sure yeah. And and the wrote the reason that we set up a lot of entities. Is. That. Whenever your bond insulin rules state and whenever you have a business you only want to have as much assets in an entity as usual comfortable. Also you have different asset classes. Right for example. Let's say you have. You know ten single family homes okay each home is worth let's say 40000 dollars right that's 400000. That might be may be that might be all you wanna put in one entity depended on what your equities right. A good rule will pull a lot of people keep this probably around 250000. Dollars in equity. For the book especially owner buy and hold elected to the makes sense that. We have a question from the audience. Is there. Ever was and you need to set up in pretty in different states in the when you live in the property buying you know I'm so glad you. Sounds like that was our national all the art that was next on my list of the the nice. Aren't I a so. That is a really really good point a lot of people say sector entity and like Nevada corporation before we heard the term Nevada corporation. Whether certain tax advantages to do that. However OK however. The problem that most of these people do not tell you is let's say you live in South Carolina like we'd. If functional but Nevada corporation Nevada entity okay. And that'll doing the business in the there's really no reason for me to set that up other then a tax. Purpose right. So it would probably be easier for if if if that entity was sued like. So that sales of property and someone they'll go horror of that day fail or something and then. You know some people go hurt. If they were to assume that entity it would be easier for them to break the corporate veil because it was setup there. Just for tax purposes low right so. What the people we work with recommended setting up an entity. In this state. Where you Leah and we're gonna do business and then the term for that is called domicile. Right your entity is going to be almost. Indeed now and and yeah. I must fully into the domicile. And who they noted that every infinite and no authority. So anyway. Right so the state wherever you set up your income that's called the state of domicile. Now let's say you set up your entity in South Carolina okay. Let's say you wanted to buy a house in North Carolina. Now what you have to do to be able to do business in north York and now you've got to go to the North Carolina secretary of state website. And you've got to fill out a form called certificate of authority to transact business and they'd ignore killer. So now you fill out that form right and limited purpose of that form the only purpose of the world. Is is really two purposes number one is so they can start taxing your only income made in that state grain right. And. A lot they share everything a lot they share. That's true. Yeah exactly. And the Q a right to Chad knows we're being audited right now that will handle this year right so let's just when this happened. So and the second reason is if you ever have to go to court for some reason right. If you do not have certificate of authority to transit business in this state you cannot gain access to the court system right. None at this the way it is in the first part you know and it. So so anyway the two reasons minute or Lebanon so you've got to have. Certificate authorities transact business in any state to do business you want to. Typically be domicile. In the state where you live right right but if if likens after all that we buy a house and in Alabama we've got to be have certificate of part mail. Don't collapse of a pure entity. And then go out this certificate authorities say I'm about houses nor can shark Georgia Alabama and Tennessee don't go get that certificate of origin trends that give you. Until you trouble closing come and ran right. Because if you do that. Could you never do a deal there. Then they're gonna start asking you for an annual report cause every year you gotta fill out an annual report on the secretary of state. And that does what that does this picture entity in what's called good standing with the lightning and with that state. And their little or no they're going to want to know. What you're revenue from forum for that particular state rights and we've had to do that in many different states you know we've done deals in twelve different states. Rightfully won police kill an. Now. So only winning have a deal in ready to close Canadian think it happened. You can author that maybe soup opera thing in and you don't ever on a property that meet your specific criteria. That's exactly right that aren't so make sure you'd dole. Do the certificate authorities transact business. Unless you have a closing comment now the other thing is whatever attorney you have that closing your transactions sometimes or title companies dependent on the state. Like like Florida uses title companies in north current stock early typically use attorneys. The attorney and filed for you future first deal and stay on the other charge you. Instead of going to the secretary's well they charge earning a name and a while they did. So you can follow yourself. Right you just go to the web site print off performance and on it's probably going to be somewhere between ten and 25 dollars depending on the state. And but they'll follow it for you but the problem charges additional books and write yes and some collector by. So that was a long roundabout way that you jets question right. You really do you didn't have cleared cleared. Something. That's that's. He did really give us that there was no growth is there anything in and did you notice who's very focused laser focused embodiment and what happened to us. So all of a. Hold up a blank sheet of paper they're a very cool about it. Yet it's it's it's all right here and it does between my ears. Or. The I don't would duplicate that. The other is some out there acute. That was that I knew what you were thinking right now about a case though. And so you have LLC east you also have corporation you can incorporated PC. Like you know X lousy investments common ink in seat that take corporation okay. And a corporation can be taxed two different ways as they seek court. And as an escort okay. And as score. Right there is typically for small businesses. For small businesses a corpus going to be businesses like you know. Like apple or. You know or Microsoft for Amazon those are going to be xi corps OK there are going to be asked corpse right. They're going to be seen corpse and those are tax different ways as well right right. Now with tax reform. Not all old mother so we can do well in other years were not. About tackle before as a as a lot going all the tax reform right huge amount it and there is there is a tremendous. Gosh if you if you're thinking about getting into rules state. If there's anything at all that we can do to help you we coach people we mentor people we have students around the country and around the world. In the US Canada Australia New Zealand Japan and China is or to Philippines Ireland to the in Denmark you can add a few times. But the number twelve who call canvas she'll get you out of three investor's kit with a couple of my best selling books right. Yet get a senator Ellison day trading and a pump up offered both and there. And it's the investors that he can give me a call 877 Larry goat and I get that out here email. You can also a text the word BER eight keep that 80389760630. Text the word the art AG. 803897606. Very. Welcome back to brag area where there is some. The vote world. Everything gets part of it from them. Why not. Didn't break out on the road anyway not that I've I am very very few things that I'm. Kelly Taylor. Its revenue and. Right you are correct my favorite you Mark Kirk of all times welcome back to brag radio. We in the world to be rich and generous were talking about Asher protection and entity structure right Candice yet. At separate. Thanks in an entity structure. That he's under a lot of information. Not written down you do now that brought a couple of notes and break it you know the nationals eats. As a protection entity structuring. You're sleep deprived and and right. And it effects and are you like him he does Nancy I think. So what is taco pass fell backwards. And that. A slow Muslim man that polish her uncle can still buy this pop group. And you're really right get the hell. Derided. Yeah. Yeah. And everybody yeah. I. That and in. So we're talking about asset protection entity structure and you're gonna do real state you need to have some asset protection okay. And you need to seek the advice of some legal counsel somebody that knows what they're doing carry now been doing this for a long time but I'm no attorney. Right I'm no attorney you know CPA. But we do have the right people in place that can help piece of needing help if cancer call will be glad to refer you. To some people right. Or the email is info IN FOM brag radio dot com. So we're talking about some entities like we've already mentioned LLC is and they can be taxes and escort or as a disregarded it right. So that's Corpas took before a business by Russian oil business for trade right. And they disregarded entity. Would be tied the game as an investment to OK it's gonna flow through and pop it's not have its own tax return is afloat through your personal return today. Mail. We've also talked about corporations. Receive INC it ain't like big companies right. Now those can be taxed as a C cor or as an escort. Okay most album for our practical purposes unless you unless you grow the business to where you have. You know multiple entities and maybe need a management company. And blessed that that's the case you're probably going to tax it as an escort but seek your advisor they'll tell you all right. Now the advantage of the seat corpus and and some of this is getting ready changed because of tax reform. But in the past with a seacor your first 50000 dollars in income. Is taxed at 15%. Okay. So what some people do that have enough assets have enough business have enough different entities they would have Jesse corpus the management company right. Yeah and they would have you know at least 50000 dollars of their income. We're it would manage some of asset to manage some of the businesses maybe provide services like accounting or payroll or something like that. In than it would be. You know it it would. They would set it up or that entity. It is about you know 506070000. Dollars in income you know based on what that entity does. And then that fifth verse 50000 is going to be taxed at 15%. A group which is a lot lower tax rate. Then typically rules that investors it right and it's causing your rules that investor usually make a lot of money but I. So you have a heart tax rate. So. Do so. The the chic or you're typically not gonna need one right you have a lot of this is going known and it talks about secondly you know about that. Now some other types of entities that you can actually title property. Rights for what we call anonymity. Mean nobody can argue my dude is why did you title. Well title means like. How it's going held that title to the property is going to be tested in other words if your by the house of 125 oak street. You can put it in XYZ investments LLC. X one Libyan investments in or you gonna put it in one point five oak street trust wrecked my infineon and in your personal and now now now a lot of people ask is it okay if I put my first deal and will do I have to set up an entity before do Bofors deal. No you don't write no you don't and you could do every one album in your personally. However that is opening new two liability pure piece suit may. End up on. And there. In Munich area you give them water and those at all from what happened and technical difficulty here. With a bullet OK playing and. OK so. You can about property in your personal name I don't recommend it the first dealer to did back in the eighties a ball in my personal name. But I but I do not recommend. What you. You know if you're serious about ready to commit you're gonna get go and discordant set up your entity. Right but chances are it's probably not gonna hurt you if you do your first deal in your own by. There's also another way you can do business and that's called as the sole proprietor. Right. That that's what you hear people say DBA. Like maybe you go to the bank. And you set up an account you know. I'm leery about houses. DBA live or lyric Owens DB lately about house. In other words you're putting yourself out there is leery about houses but to buying and selling their own right there's zero asset protection for the zero this somebody's who's leery about houses and that's the sole proprietor then they can come after all your personal last night through someone sues. XYZ investments LLC are excellent the investments ink. They can only sued assets and soon for the assets that are in those entities. Right unless. Something happens and they can do what's called break the corporate veil the horses are corporate veil when you have any kind of an entity. That protects you personally that's reason you have those entities set up in the first place right. To be prepared to protect. Your personal shots right. But if someone sues that in that the if you did not keep things up like he poker corporate books with your annual shareholders meeting their annual member of managing member meeting. Sort of thing where their quarterly Alon the who write them if you include. They may be able to break that core prevail. Down probably not just because of the minutes of the meeting or minutes of the corporate books but. Let's say if you if you have this entity XYZ investments. And let's say you won't take your family out for dinner. And then you use the company's credit record for that. If you have no disregard for its really two separate entities then. It's more possible that you could have the corporate veil broken another or computers also and ever was while you just write yourself a check out of the company. When that document it was no documentation that the where it's an older distribution. Or where it's. It's all or distribution or its payroll or whatever it is dead and they can disregard that entity and have some almost sue and you. They could go after your personal assets and that would be the London you know that's not good at all. So yeah. You wanna make sure you get to set up right. And make sure that you have somebody that knows what to do and like I said before Candace can help you we can put you in the on the right track thing at the right person right. Rain is strained I get to do is send me an email info at Bragg radio dot com and I cannot either refer you over to those people are. How to reach out TU one man the other owners easier for you. We get also lower lower in communication and get to the investors kid out the digital version. Out here email address and just need that address to get that to you can give me a call 877 Mary snow. 877 Larry go. Or you can text the word brag and be our AG. 80389760630. I really do like their questions that are permanent so I hope he does keep those comments info at Bragg radio oh. And we are red shoe for upcoming three day events so we can take care that. Let us they have gone and we got a lot going all the stores and a it. So scary out there among the other day we have typical amount left me. This past like the wind is we have two or three or four people week and then it was pretty cool they go by and look at all the deals and stuff. Mean everybody tunes sent packing at that sent for you as well. Again inches 877 Larry again to have that's squared away. A few. Haven't been listening to act as you can catch all of the past shows. On brag radio dot com or bearing act. And we're back. Welcome back to brag radio leaving the world to be rich and most most dinner at mr. Now if you guys are calling me on the eighth seventh seven Larry got number. On note that I have and via his inner office she's helping me with taken the calls so. If you don't give me right away and she's the Lynette calls you back she is legitimate she is working in our office. The dollar billion dollar frustrated with media don't get frustrated with naymick and you you're gonna speak to me and you haven't heard in the news. She has given any send post it notes that few of the island arc mean. In and that's fine Connie Mack but. With a number of people that we have colonies in today's show. Afterward and linked throughout the week after. She's been helping me because it's it's been. It is where I was in California just the other day. In LA I was there literally for twelve and half hours. A publicly about it. And a landed at 5:30 PM and left six year. So anyway while I was there before the Bryant radio show love in California. Let's. And what the that's the Atlantic and we didn't meet that that as lead but it opened everywhere. Its own I'd practices. And now he now. Human. Podcast with. Hi Kath and even parcels of land trust the in games. Which got more of an eye. On the opposite. I can't. Say it. Is this an all out and do and can't get it done. Well. You know little are ringing from the little nervous I heard the Harlow wouldn't like listen critique that's. On the little of that change Dolly but I didn't get a changing after. That's true Indian dance at that for your benefit with. Determine whether or not going to be another year and think they can't sit there you know. Our I didn't. So let's talk about land trust you that's one of the types of ways that you can structure or title property. Right does that makes. That you can structure or or title property should. So. Land trust provides anonymity. But not pass protection does that make sense Andean. A land trust provides what's called anonymity. But it doesn't provide pass protection and even example. My idol when Walt Disney was acquiring property. And Orlando. To build does it play and only if so why he had he had to make offers and Biddle properties. There were owned by many many different people massive amounts and ride it right to hundreds of acres so. In order to do that he couldn't he couldn't have. He couldn't be bidding on the property. Or trying to buy the property in the name of Walt Disney. He bought it in the name of trust right bunch of different named a bunch and they trust right so nobody you. That you know quietly Walt Disney was acquiring hundreds of acres that would essentially be known as does it. It was very Smart and possibly get so that the bottom line is. You know no one can tell who actually owns the property of that and trust a guy goes with the trust. There's the trust agreement which tells the name of the trust right. Tells the name of the trust and the trustee. And the beneficiary right so the trust document. Is what says. Who owns the property right through the beneficiary is who trustee is in the mean that that properties or land trust that we. So then you have a trustee the trustee is someone you know like and trust. That they have to slant for everything. But it can't be the beneficiaries shouldn't be this year it should be someone that you know like and trust with a different last for example. We abuse of trust and some retirement accounts right. And even though like my retirement account was the beneficiary. And then you have the trust agreement. You were the trustee canvas a threat so I couldn't Barroso and properties without Candace is permission. She had more violent and she had to do right so she and other words she signed everything as trustee so no one knew. Whose retirement account or who actually old the properties of so. So basically it's for sure enough as it protection but for you know anonymity so nobody content and so. You need another layer in there you need to make if you're gonna bomb property in trust and you wanna keep that anonymous assistant who owns. Instead of making yourself the beneficiary you wanna make an LLC the beneficiary could nobody have that piano player yet. Nobody is ever going to see the trust OK nobody's ever conceive. Right and that may be my short to the attorney. But you tell them to share and rip it up whatever don't keep a copy of the in the file and nobody really knows who owns it now skews excuse me. Over the water there an affair gone. Anyway. Alicia never comes up in a lawsuit. And lifted it up in a lawsuit. Right and in view you have to you have to do deposition. Deposed by an attorney. It may come in who actually holds it but it also just provides later there's a lot of work effort and made it here. It is a lot of fun and quite frankly a lot of attorneys do not understand. Frost or specially in trust they just don't understand so somebody brings a case to him we're property's title and trust. A lot of attorneys would turn it they don't understand it. They don't know much about it and I'm rushing anything bad about attorneys not at all not a lot level know about. Land trust and opera re good if not than any gala on a daily basis that Canon Ian probably take a lot more iron dedication Alec in team. And that's what they call your house that it basically someone's gonna pay them to learn about trust me if they don't already know. The accent yet. But there's land trust and that's what you title property it. There's also what's called personal property trust me I mean you can you can indeed your cars or title cars and it personal property trust. You could have your bank accounts title and personal property trust. You know that sort of thing you can also have what's called an irate trust. And that's one of the ones that we just talked about where you would trust the of my IRA trust okay. Now we eventually added another layer where there's an LLC in there as well right. Exactly exactly so. There's advantages of land trust. Especially if you're gonna hold property long term if you're just buying and selling them on silent. There's typically no need for trust. You know on and on. If you're just flip but a property you're just turning it over there's typically no reason to strike and I. So. Now to come around this out at rapid. There's also. You can create and an entity. Like gay a lot of people called a check book RA I don't really liked the term that I mean there's there's promoters out there this that you can get a set up an LLC in the you can write checks off your car array. Does that be very very very careful about what you wanna do with the right way if you do have. What's called a checkbook or array or and or you are re invest into an LLC. Where you can control it. And write the checks and haven't reached out to your custodian. To get the money. Make sure you find somebody that could shed enough for you we've got a guy that does all of our divorced he knows what he's doing he's very very good about this. And he makes sure that you do it correctly. Where you're not going to get in trouble okay all right very very very important so please make sure that you do this now there are advantages to it. And you can do with the right way. And and be very successful on it where you can buy and sell property. And not have to go through the custodian each and every time out right right but there's certain things you need to do like you need to have a specific operating agreement. You don't want to beat you let evidently the you don't want to be. The managing member you wore your. There's a lot of stuff that goes into this gas and be sure to send me an email to info at Bragg radio dot com hopefully you're trying to write all of this mess down. We conduct filling. Make sure that he would be recording an associated show notes and things like that in brag radio dot com. A visit to brag radio dot com our gimme a call 877. When Larry got 877 Larry yeah. Make sure to tune in every Saturday for brag radio leaving the world to be rich and generous. Marion Candace was for you how to invest in real estate in the many ways real estate creates the ideal investment. More information about what Larry Candice talked about on today's French radio or to get a free investors get. Call 877 Larry gulf that's 8775277946. You can also text the word brag to 8038976063. It's frank radio be rich and better at Sunday's top 1110993. WBZ.