Believe it or not, as a real estate investor you can only lose money in two ways. Think about it. Either you make a bad investment, or someone sues you and takes your hard earned money. Other then that, you’ve got nothing to worry about!
As an attorney, and someone who used to sue people, I can honestly say that lawsuits are basically just legalized stealing. Although, sometimes lawsuits are for a good purpose. But usually they’re not, especially in the real estate industry.
How Do I Protect my Money?
So remember, being sued is one of two ways you can lose money as a real estate investor. This means one of the key things we have to do to guard against half of the way we can lose our money in real estate investing is to protect ourselves specifically from lawsuits.
You’re able to protect yourself from lawsuits by using an asset protection strategy. An asset protection strategy protects you from lawsuits and anybody looking to try to sue you. It makes suing you a gamble.
But here’s a question. Why do real estate investors, or anyone else for that matter, get sued?
Real Estate Investors Are Sued for Their Success
Basically, you get sued because you have money. Someone else will always want your money. If you didn’t have any money (or real estate assets that represent money), nobody would waste their time trying to sue you. So the question becomes, “how do I make it look as if I own nothing?”
You do that by using an LLC structure. You put your assets in an LLC, which is then owned by an anonymous trust. Nobody will be able to trace your assets back to you, meaning nobody will be able to sue you.
Another way to protect your money from lawsuits is by creating a series of fortresses (LLC’s) to put your assets in. What we do is make each LLC appear low value and difficult to penetrate during a lawsuit. So even if they do penetrate it, they’ll get nothing.
Suing you will be seen a gamble. And guess what?
Attorneys Don’t Like Gambling on Protected Investors
What an asset protection strategy does is make an attorney feel like suing you is the equivalent of going to Las Vegas to gamble. Suing you is usually a gamble for an attorney anyway, since most attorneys take cases on contingency (they don’t get paid unless they win.)
Since most attorneys take their cases on contingency, they’re playing to win. So there’s no way they’ll take a case they think they can’t win or isn’t worth their time.
At Royal Legal Solutions, we make it a gamble for attorneys to come after your money and your real estate investments. And remember, lawsuits are a business. By making it a gamble to sue you, the reality is it won’t make business sense to try suing you. They just won’t try it.
If you have any questions about asset protection, feel free to ask me in the comments below or check out more of my blogs. If you’re ready to make your assets judgment-proof, schedule your consultation today.