LLCs Can Protect You From Issues That Insurance Refuses to Acknowledge
[00:08] The truth is is there’s a lot of that information when it comes to real estate investing and how to protect your assets, whether it’s Joe Lucky, the keyboard warrior from an internet form or your CPA or the worst case scenario, a general practitioner that thinks he has a clue about what it means to be a real estate investor. If they tell you that all you needed shirt is insurance, they are wrong and Sherman’s protects you from different types of claims than an LLC does. Let’s take for example a case that I had a client a, it wasn’t a slip and fall on her front porch. It wasn’t that a, you know, somebody had a simple case of negligence and the management of the property. Well those would be things that insurance would cover and hurricanes is that she remodeled the house and she replaced the plumbing underneath the house.
[01:02] The buyers asked her in an email, what plumbing underneath the house did you replace? And her response was all of the plumbing in the house had been replaced. Come to find out three months later after the sale that there was a leak. In the plumbing resulting in tens of thousands of dollars to damage because the buyers at that point, we’re out of town. Well, what do you think happened? Well, a loss of habit because the buyers were saying that your email was intentionally fraudulent. When you told us that all of the plumbing in the house had been replaced. This isn’t a case of a seller who was intentionally misleading a buyer. This is a case that happens with almost all losses. It’s a misunderstanding. You don’t have to be a bad person to get sued. All you have to have is a misunderstanding. Luckily for my client, Jen, a proper asset protection strategy in place with a series of little seat that allowed us to negotiate the very advantageous resolution to the case. In fact, that particular case, we were able to get completely drunk. My name is Scott Smith. I’m an asset protection attorney specializing in real estate company structures. I protect my clients and make them judgment and I’d like to help.
[02:32] If you thought this content was good, you have to go see the bigger pockets podcast that I did. It was the top 10 things every real estate investor has to know about asset protection, and you can go listen to it right here.