EP197: The Legal Loopholes of Real Estate Investing - Interview with Garrett Sutton

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This episode is brought to you by ZipRecruiter. With ZipRecruiter, you can post your job to 100+ job sites with just one click. Right now, Investing in Real Estate listeners can post jobs on ZipRecruiter for free by visiting ZipRecruiter.com/investing.  

As you establish and grow your real estate business, it’s important to consider how to protect your assets. This is something many investors overlook, and sadly most learn their lesson when it’s too late. On today’s show, we’re calling in an expert to discuss how you can protect yourself and your business!

On this episode of Investing in Real Estate, I’m sitting down with Garrett Sutton. Garrett is an attorney, best-selling author, and Rich Dad advisor! On today’s show, he’s demystifying legal issues, and breaking them down in an understandable and accessible manner. Garret has so much wisdom to share; you won’t want to miss episode 197!

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If you’re working tirelessly to create financial freedom for you and your family, it’s imperative that you protect yourself. Part of this protection entails keeping your real estate investments in a legal entity. It’s actually quite simple to set up an LLC, but Garrett Sutton posits that many new investors skip this step.

They either believe that it’s too expensive to register their business, or they procrastinate and eventually forget. If you own real estate in your own name, and then get sued, all of your personal assets are exposed to the lawsuit.

Working with his clients, Garrett likes to thoroughly explain the law, its risks, and then allow them to make their own personal decisions. For real estate investors specifically, he typically recommends one property in each LLC.

This is because in the event of a lawsuit, a tenant would sue the LLC that owns the property. If the tenant were to win the lawsuit, they could potentially gain the equity of all properties in that business entntiy.

On today’s show, Garrett is sharing more loopholes of real estate! We’ll discuss the tax code and asset protection, and how to set up your real estate insurance properly. Don’t miss episode 197 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How many real estate investments should you put in a business entity?

  • What is a quit claim deed?

  • Will a title transfer trigger a due on sale clause?

  • What is continuity of obligation?

  • Which state in the US provides the best asset protection?

  • And much more!

Episode Resources
ZipRecruiter
Loopholes of Real Estate by Garrett Sutton
Start Your Own Corporation by Garrett Sutton

Run Your Own Corporation by Garrett Sutton 

Writing Winning Business Plans by Garrett Sutton

Buying and Selling a Business by Garrett Sutton

The ABCs of Getting Out of Debt by Garrett Sutton
More Important Than Money: An Entrepreneur’s Team by Robert Kiyosaki and the Rich Dad Advisors
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel 

Like Morris Invest on Facebook

Contact Garrett Sutton
Get a free 15 minute consult with Garrett’s team by calling 800-600-1760
Website
Facebook
Twitter
LinkedIn

 On today’s Investing in Real Estate show, Garrett is sharing more loopholes of real estate! We’ll discuss the tax code and asset protection, and how to set up your real estate insurance properly.

EP184: How to Choose and Use Business Bank Accounts

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If you run your real estate venture like a business, you’ll want to utilize a business bank account. But not all business bank accounts are created equal! It’s important to not only find the most cost effective solution, but also the account that fits your specific business’ needs.

On this episode of Investing in Real Estate, Natali and I are discussing how to find the right business account, and how to use it appropriately! We’ll share our personal experience with using both big banks and local banks. We’ll discuss the mistakes we’ve made, how you can get your accounts in order, and much more!

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Admittedly, we’ve opened a lot of different business bank accounts throughout our real estate career. If you aren’t used to running a business, this is an expertise that must be learned. It’s important to choose a specific business account, and not one that is intended for personal use.

When we opened our very first business account, we went to Bank of America, simply because that’s where we already banked. However, at that time, BOA charged $35 every month for that account. Remember, every single expense in your business comes out of your ROI, so we had to shop around.

Eventually, we found a no fee business checking account with a local bank. We have found that more often than not, you will have better options with a local bank. We always suggest shopping around, and the site Bankrate can help you find what meets your needs.

On today’s show, we’ll share why we still have business accounts with three different banks, and how we utilize each of them. We’ll talk about the importance of a no fee account, as well as finding an account without balance requirements. If you’ve ever wondered about setting up banking accounts for your real estate business, this episode is for you! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family. 

On this episode you’ll learn:

  • How can you determine if you should use a credit or debit card for your business expenses?
  • What should you expect to pay a bank for a wire transfer?
  • What should you look for when shopping for checks?
  • What are the two big mistakes we made when we first started using business accounts?
  • What should you do if you accidentally use your business account for a personal expense?
  • And much more!

Episode Resources
NeatReceipts
Bankrate
Tax-Free Wealth by Tom Wheelwright
How to Pay Off Your Mortgage in 5 Years by Clayton and Natali Morris
EP169: How to Set Up Profit First for Real Estate Investing – Interview with Mike Michalowicz
ProVision Wealth Strategists
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 

 

 If you have a business, you’ll want a business bank account. But not all business bank accounts are created equal! It’s important to not only find the most cost effective solution, but also the account that fits your specific business’ needs.

EP170: Business Entity Structure for Legacy Wealth Building - Interview with Andrew Howell

Book a call with our team: https://goo.gl/dezwHT

Have you ever wondered how to set up your business entities in a way that not only protects your assets, but also allows you to build long-lasting wealth for your family? If so, today’s show is for you! We’re welcoming back Andrew Howell, a founding member of the estate planning law firm, York, Howell, and Guymon.

Andrew Howell is also a co-author of the incredibly insightful book, Entrusted: Building a Legacy That Lasts, and he is our personal estate planning lawyer. On this episode of Investing in Real Estate, we’re diving deep into business entity structure for investors!

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On episode 167, which is part 1 of this interview, Andrew explained how to structure basic estate planning in order to build wealth. But today, he is sharing the intricacies of estate planning for real estate investors. In his law practice, he explains that estate planning is the first piece of structuring a real estate investing business.

When you purchase a piece of real estate, there are two huge liability risks. First is the piece of real estate itself. In the event of a natural disaster, an entire investment can be lost. There is also the risk of a person becoming injured on that property.

That’s why an LLC is so important. As you might know, this entity protects the individual’s personal assets. Since the entity itself owns the property, the LLC is liable in a lawsuit.

An LLC also protects a person’s ownership interest if set up correctly. In a business' operating agreement, its owners can agree to not transfer their interest unless all parties agree. Doing so protects the business owners from losing their business interest in a lawsuit; it adds an extra step in an already long and costly process. 

On today’s show, Andrew is sharing all the details about passing down real estate to descendants in a meaningful way. We’ll discuss why asset protection planning is so important, and how to think about generational wealth building. Don’t miss episode 170 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family. 

On this episode you’ll learn:

  • How do estate taxes work generationally?
  • What is a hot asset, and how can you cool it down?
  • Where was the LLC first created?
  • How often do estate taxes change?
  • How can you think of asset protection as a game?
  • And much more!

Episode Resources
EP167: Basic Estate Planning for Legacy Wealth Building – Interview with Andrew Howell
Entrusted: Building a Legacy That Lasts by Andrew Howell and David York
Provision Wealth Strategists
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 
Contact Andrew Howell
Email
Call at 801-527-1040
Website
Facebook
Twitter
LinkedIn

 Have you ever wondered how to set up your business entities in a way that not only protects your assets, but also allows you to build long-lasting wealth for your family? If so, this is for you!

EP167: Basic Estate Planning for Legacy Wealth Building - Interview with Andrew Howell

Book a call with our team: https://goo.gl/dezwHT

This episode of Investing in Real Estate is brought to you by RealtyShares. With Realty Shares, hundreds of people invest fractionally, reducing the cost of the initial investment.  If you have $5000 and qualify, you can begin group investing. Visit realtyshares.com/IIRE to receive $100 toward your first investment!

In our personal family business of purchasing buy and hold real estate, our main goal and purpose  is to build legacy wealth. As we purchase cash-flowing properties, we intend to pass them to our children when they become adults. Our estate planning lawyer, Andrew Howell, along with his partner, wrote an incredibly insightful book about leaving behind a legacy. 

On today’s show, Natali and I are sitting down with Andrew Howell to discuss the main principles of his book, including how to structure estate planning in order to build legacy wealth. We’ll talk about his holistic approach to estate planning, protecting your assets, and so much more! Don’t miss episode 167 of Investing in Real Estate! 

More About This Show
Andrew Howell explains that most estate planning is not done in congruence with the ways people think. Although the first thing that comes to mind about estate planning is monetary wealth, true wealth encompasses much more.

A person’s wealth cannot be evaluated by viewing a balance sheet. Wealth includes things like values, lessons, means to success, and much more. In his law practice, Andrew encourages his clients to create a family mission statement.

This exercise gives the family a guide to make financial decisions. He explains that families should figure out their core values, and then make their estate planning in alignment with those values. Many people do this backwards, which makes the entire process, including completing important documents, much more difficult. 

The purpose of Entrusted is to help families better plan how they intend to transfer their wealth to succeeding generations. The book outlines seven proven principles that allow families to build wealth, and a family legacy that transcends generations. 

On today’s show, Andrew is sharing the important principles of wealth planning. He’ll share the proven method for transferring inheritance, and when you should start thinking about estate planning. Andrew's advice is invaluable; you won't want to miss this episode of Investing in Real Estate! 

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • What percentage of people do not plan for estate planning?
  • What are the three main fallacies of estate planning?
  • In terms of transferring wealth, what is the main difference between the Vanderbilts and Rothschilds?
  • What are the five core estate planning documents?
  • What is the main purpose of a Last Will and Testament?
  • And much more!

Episode Resources
RealtyShares
Entrusted: Building a Legacy That Lasts by Andrew Howell and David York
Rivets Game
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

Contact Andrew Howell
Email
Call at 801-527-1040
Website
Facebook
Twitter
LinkedIn

 Talking with Andrew Howell about the main principles of his book, including how to structure estate planning in order to build legacy wealth. We’ll talk about his holistic approach to estate planning, protecting your assets, and so much more! 

EP165: Case Study: Start Up Costs for Buying Your First Rental Property

Book a call with our team: https://goo.gl/dezwHT

This episode of Investing in Real Estate is brought to you by ZipRecruiter. With ZipRecruiter, you can post your job to 100+ job sites with just one click. Visit ZipRecruiter.com/investing to post your jobs for free!

We’ve discussed the regular expenses you should account for as a real estate investor, but what should you expect when you’re just getting started? On today’s show, I’m sharing five start up costs that are associated with real estate investing.

On this episode, I’ll discuss exactly what costs you should expect to incur when you’re starting your real estate business. I’ll talk about setting up your business entity, closing on your investment property, and more! It’s all here on episode 165 of Investing in Real Estate!

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The types of properties that we provide at Morris Invest are single-family homes in the Midwest. These properties are typically in the $40-50k range. For this kind of investment, there are a few costs you should expect when you’re getting started.

  1. Setting up your business entity. Typically, this will be an LLC. There are a few ways to do this, but I typically recommend going right to the source—the department of state website where your property is located. In some states, you may need to use an attorney. To set up an LLC, you should expect to pay anywhere from $100-300.
  2. Insurance on your rental property. This amount can vary, as it depends on your location and coverage. Typically, I pay anywhere from $400-600 per year for rental coverage and liability insurance.
  3. Setting up a business checking account. You’ll need to have a business checking account to collect rent every month. Some banks charge a monthly service fee as well as minimum opening deposit. Local banks may have free accounts, so shop around.
  4. Closing costs. When you purchase your rental property, the title company will charge fees. A good rule of thumb is anywhere from $300-500. This amount accounts for running a title search and recording the deed.
  5. Landlord license. This cost is not applicable in every state, but some states do require a landlord license. If your property is located in a state that requires a landlord license, you can expect to pay $100-150 on a yearly basis.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family. 

On this episode you’ll learn:

  • Which states are the most expensive for setting up business entities?
  • What information do you need to set up a business checking account?
  • Where can you get your EIN number?
  • How do you acquire a landlord license, if necessary?
  • And much more! 

Episode Resources
ZipRecruiter
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 Case study: Five start up costs that are associated with real estate investing.

EP157: Using the Money in Your LLCs' Bank Accounts

Book a call with our team: https://goo.gl/dezwHT

This episode is brought to you by Mack Weldon. Visit mackweldon.com and use promo code CLAYTON to receive 20% off your order of high quality clothing!

When you have a business entity, especially multiple business entities, banking can become complex. There are many reasons why you might need to move your money, but there are strict regulations, as well as tax implications that will dictate how this should be done.

On this episode of Investing in Real Estate, Natali and I are discussing how to use the money in your LLCs’ bank accounts. We’ll share what we’ve learned, the mistakes we’ve made, and more! Please join us for episode 157!

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We’ve discussed before the importance of owning real estate inside of LLCs, and how we personally structure our banking accounts. Each LLC should be treated as its own bank entity. The LLC has an EIN, which is owned by you, and gets reported on your personal tax return.

But that doesn’t mean the funds inside that LLC banking account are yours for the taking. You can’t write a check from your LLC’s business account to purchase groceries for your family. In fact, that’s known as commingling, which is illegal.

The rent that you receive as income every month should be paid to the order of the LLC. Those funds must be deposited into the LLC account. You should not deposit checks into your personal checking account.  

In our business, we have our LLCs under holding companies. This was done at the counsel of our legal team. We’ve been advised that under the circumstances that we need to move money, the LLC should send the funds up the holding account. That account can then disperse the funds accordingly. It’s incredibly important to have some sort of trail of proof any time funds are rearranged.

On today’s show, we’ll discuss more about our personal banking structure, and how we use our different accounts. We’ll talk about the Profit First system, the importance of treating each entity individually, and how umbrella LLCs are taxed. It’s all here on episode 157 of Investing in Real Estate!

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • Can you use funds in one LLC to purchase a property for another LLC?
  • Can you be taxed twice on money that you’ve transferred?
  • What is a distribution?
  • Does your owner pay account need to be owned by the LLC?
  • When should you consider setting up a holding company?
  • And much more!

Episode Resources
Mack Weldon
EP010: How to Set Up Profit First for Real Estate Investing – Interview with Mike Michalowicz
EP040: How to Implement Profit First for Real Estate Investing
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel

Like Morris Invest on Facebook

 

 How to use the money in your LLC's bank accounts - plus mistakes we made that you'll want to avoid. | Real estate investing | Small business

EP145: How to Deed a Property to an LLC

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As a real estate investor, there are many reasons why you might need to deed a property to an LLC. We get asked questions about this topic frequently. Since Natali and I recently went through this process, we thought we’d share exactly how it’s done.

On this episode of Investing in Real Estate, Natali and I will walk you through the process of deeding a property to an LLC. We’ll share everything you need to know, including banking information, insurance policies, and more. Join us for episode 145 of Investing in Real Estate!

More About This Show
The first thing you’ll want to do is transfer ownership. You’ll deed the property from either yourself or the LLC it’s in to the LLC you want it to be in. We have used the services of a lawyer to accomplish this. Depending on your state, you can use either a lawyer or an escrow company.

After the LLC is established, you’ll need to get all of the components in place to ensure the LLC runs smoothly. You’ll need to set up a bank account. Take your new EIN number to the bank and ask for a business account.

It’s also important to consider how this new setup will affect your insurance policies. Be sure to contact your insurance company to transfer the property to the correct LLC.

You’ll also want your property management company to be informed of any changes. They need to know if their check or ACH should be made to a different LLC. If you’re a DIY property manager, then you’ll need to instead inform your tenants.

Additionally, you should call the tax department in the county where the property is located. Inform them of the changes you have made. This ensures that your tax bill will be sent to the correct owner at tax time.

If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.

On this episode you’ll learn:

  • How much should you anticipate to pay per deed?
  • What is the difference between a quit claim deed and warranty deed?
  • What are the tax implications of transferring a house to an LLC?
  • What should you put in a due diligence spreadsheet?
  • And much more!

Episode Resources
Provision Wealth Strategists
ReadQuick
Subscribe to Investing in Real Estate on iTunes
Find Your Financial Freedom Number
Subscribe to the Morris Invest YouTube channel
Like Morris Invest on Facebook

 As a real estate investor, you may want to hold property within an LLC. Here's how to deed property to an LLC.