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The Delaware Series LLC for Real Estate Investors

September 16, 2012 by Marco Santarelli

Following up to our previous article titled, “3 Reasons a Series LLC Should be a Real Estate Investor’s Best Friend“, we now focus on benefits of a Delaware Series LLC.

The Delaware series LLC is a form of a limited liability company that provides liability protection across multiple “series”, each of which is theoretically protected from liabilities arising from the other series.  It is similar to a parent/subsidiary structure, such as GM and it’s various brands.  For example, you could have a master LLC that owns different subsidiaries which in turn own small groups of real estate.  The subsidiaries would shield both the master and other subsidiaries from liability.  Thus, a real estate investor can reduce the exposure to the assets that any one subsidiary owns.

[Read more…]

Filed Under: Asset Protection, Real Estate Investing, Taxes Tagged With: Asset Protection, Delaware Series LLC, Real Estate Investing, Real Estate Taxes, series llc

Investing in Real Estate Using a Self Directed IRA

April 10, 2012 by Marco Santarelli

A growing number of real estate investors are using a self-directed IRA to finance their property purchases nowadays. That’s because a self-directed IRA can provide them with the opportunity to buy real estate and earn rental income without paying early distribution fees.

The Investment Company Institute – the national association of U.S. investment companies, estimates that about $4.7 trillion in IRAs were held in the U.S. last year. Of this, an estimated $94 billion (only 2 percent) are in Self-directed IRAs.

[Read more…]

Filed Under: Asset Protection, Financing, Real Estate Investing, Taxes Tagged With: ERISA, Real Estate Investing, Real Estate IRA, self-directed IRA, Self-Directed Retirement Account

7 Reasons to Use Land Trusts

July 14, 2010 by Marco Santarelli

The land trust is a very powerful tool for the savvy real estate investor.  A land trust is a revocable, living trust used specifically for holding title to real estate.  Each property is titled in a separate trust, affording maximum privacy and protection.

Here are seven reasons to use land trusts:

1. Privacy.  In today's information age, anyone with an internet connection can look up your ownership of real estate.  Privacy is extremely important to most people who don't want others knowing what they own.  For example, if you own several properties within a city that has strict code enforcement, you could end up being hauled into court for too many violations, even minor ones.  Having your real estate investments titled in land trusts makes it difficult for city code enforcement to find who the owner is, since the trust agreement is not public record for everyone to see.

2. Protection from Liens.  Real estate titled in a trust name is not subject to liens against the beneficiary of the trust.  For example, if you are dealing with a seller in foreclosure, a judgment holder or the IRS can file a claim against the property in the name of the seller.  If the property is titled into a trust, the personal judgments or liens of the seller will not attach to the property.  This effectively separates the owner or seller from the property.

[Read more…]

Filed Under: Asset Protection, Real Estate Investing Tagged With: Asset Protection, land trust, land trusts, privacy, protection, Real Estate Investing

Don't Become a Seminar Junkie: Experience is the Best Teacher

June 23, 2010 by Marco Santarelli

I know of some people who have become totally caught up in the euphoria of newfound knowledge and just couldn’t stop buying audio programs and attending very expensive seminars and bootcamps.  This seminar junkie must have spent at least $50,000 within a 12 month period and still hadn’t bought their first investment property.  They were just bouncing around from one great idea to the next.

I don’t know whether, in their case, it was because they were just caught up in the excitement of that environment, whether it was their way of convincing themselves they were active when they may have been too scared to get started, or they were honestly trying to find the best strategy for them.  I’m guessing it was a mix of these things.

I also know of an investor who took quite the opposite approach.  He stumbled across a pretty good investing strategy and didn’t check out any other alternatives but went ahead and spent over $10,000 getting a good education in that one area.  He went on to build a decent portfolio over a few years but then realized there were some even better strategies out there.

This second story isn’t so bad because he built some success and he could afford the further education he now sought.  However, he told me once that it was a little disheartening because if he wanted to pursue a different strategy he had to start the learning process all over again and it felt very much like he had his “ladder to success” leaning against the wrong wall.  And even though he could now afford the education more easily it was still another $5,000 – $10,000 that he could have avoided spending.  If only he'd done his homework first.

[Read more…]

Filed Under: Asset Protection, Real Estate Investing Tagged With: investment insurance, property insurance, Real Estate Investing

3 Reasons a Series LLC Should be a Real Estate Investor’s Best Friend

May 25, 2010 by Marco Santarelli

For those of you wondering, a Series LLC is a regular LLC with a twist – it can have an unlimited number of subsidiaries (called Cells), and each subsidiary is treated as a separate structure where liability is concerned – if you set the structure up and run it properly. So far eight states have Series LLC legislation on the books (Delaware, Illinois, Iowa, Oklahoma, Nevada, Tennessee, Texas and Utah). But even if you don’t live or own property in one of those states, you can still use a Series LLC by qualifying it to do business in the state(s) where you want to operate.

I think this is perhaps the ideal structure for real estate investors (and anyone else) who wants to keep their assets safe without spending all the profit on legal structures.

Here are my 3 favorite reasons to use a Series LLC with real estate:

[Read more…]

Filed Under: Asset Protection, Real Estate Investing Tagged With: Asset Protection, delaware llc, nevada llc, Real Estate Investing, series llc

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