When you’re investing in real estate, one important aspect you don’t want to overlook is asset protection. Asset protection is a critical part of your success as an investor, so it’s important that you seek individualized, specialized advice from a seasoned professional.
Today’s guest, Clint Coons, is one of the founding partners of Anderson Law Group. Clint personally owns over 200 properties, and he is passionate about helping real estate investors protect their wealth. On this episode of Investing in Real Estate, Clint is sharing his expert advice on asset protection, LLC structuring, and so much more!
On this episode you’ll learn:
- How Clint got started in real estate, and the biggest mistake he’s made as an investor.
- Tips for vetting your tax and legal teams.
- The biggest mistake investors make when it comes to asset protection.
- How to determine how many LLCs you need.
- And much more about asset protection!
How Clint Got Started in Real Estate, and the Biggest Mistake He’s Made as an Investor
Clint’s father was an investor, so he grew up with a general understanding of the real estate business. Because his father was able to retire at age 50, Clint saw the value in being a real estate investor. After losing a large chunk of his stock portfolio in the stock market, it was solidified for Clint that he wanted to focus primarily on real estate.
In 2009, he bought his first rental property for $95,000 in Memphis, Tennessee. From there, he expanded into many different markets across the US. Today he has over 200 properties.
Clint says that his biggest mistake as a real estate investor was buying in a market that he didn’t fully understand. He once invested in Indianapolis and worked with a property management team that stole his rental income. While this experience was difficult, it changed the way that Clint ran his business for the better.
Tips for Vetting Your Tax and Legal Teams
When it comes to tax and legal advice, you need to make sure you have the right team for the job. Clint suggests that you interview professionals to ensure that they know and understand the real estate industry.
Asking a lawyer or accountant if they understand real estate isn’t enough. Clint suggests using specific real estate keywords in your interview. Ask them about terms like house hacking, the BRRRR Method, and wholesaling to get a feel for their knowledge and experience. Additionally, another great tip is to ask them how much real estate they own personally.
The Biggest Mistake Investors Make When It Comes to Asset Protection
The biggest mistake the Clint sees in his office is that investors think that insurance alone will protect their assets. This is usually not the case because most insurance policies are riddled with exclusions. There are so many things that can come up that are often not covered by insurance policies.
How to Determine How Many LLCs You Need
In the past, Clint said he used to set up LLCs from an equity standpoint. Specifically, he would tell his clients to put less than $200,000 value in each entity. However, this strategy has changed over the years and depends on the client’s portfolio and net worth.
For a new investor, he suggests putting each rental property in its own LLC. This is to protect your income. If you own three rental properties and they’re all in the same LLC, you could lose them all in a lawsuit. Losing all of your rental income can be devastating as a new investor.
Once you get to a certain level, you can then start to group your properties in LLCs. All legal advice should be individualized, which is why it’s so important to work with an expert who understands real estate investing.
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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