Flip Tip Summary
There’s a lot of mis-information in the marketplace as to how to protect your real estate, and even what types of legal entities are best. Land Trusts, while not widely understood, are powerful tools to help you mitigate risk. In this FlipNerd.com Flip Tip, Randy Hughes, Mr. Land Trust, tells us more. Don’t miss it!
Flip Tip Transcript:
Mike: It’s Mike Hambright from flipnerd.com. We have a quick “flip tip” to share with you from Randy Hughes, also known as Mr. Land Trust, who’s going to share a tip on how to protect yourself with land trusts and separate your liabilities.
Randy: Hey, Mike. Thanks again for inviting me to do this. I think that it’s important for real estate investors, especially those that are maybe just getting into the business, or maybe five or ten years into this business, to understand the concept of separating your liabilities. What I mean by that is when you buy real estate, you need to put that real estate title in a separate trust from all your other assets.
In other words, don’t combine assets in any one entity. Don’t put ten pieces of real estate in one land trust. Don’t put ten pieces of real estate in one LLC or one corporation. That just makes a nexus for a lawsuit.
The concept here is “Don’t put all your eggs in one basket.” Put each egg in a separate basket. The way my recommendation is, put each egg, each piece of real estate in a separate land trust. Hold title in the land trust, then the beneficiary of the land trust might be your LLC or your corporation or another type of trust, actually. Let’s start with title holding in a separate entity so each property is insulated from the other.
Mike: Thank you for joining us for another FlipNerd VIP tip.
We’d like to thank our sponsors, RealtyMogul.com and National Real Estate Insurance Group.
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Mike: Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.