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SHOW NOTES FOR EPISODE 053 – WHY REAL ESTATE INVESTORS USE LLCs WITH CLINT COONS
In this episode, asset protection attorney Clint Coons discusses the importance of using LLCs to protect your investments and yourself. Clint shares little-know secrets and tips for guarding against law suits and greedy attorneys. Clint is both an investor and the founder of Anderson Business Advisors, a Nevada-based law firm specializing in asset protection for real estate investors.
What You Will Learn
- What is an LLC?
- Why is an LLC necessary for real estate investors?
- What is an anonymity shield?
- How you can walk away from possible lawsuit liability if you structure your business right
- Why is it best to open your LLC in a state with “Charging Order Protections?”
- Why it’s a good idea to have a separate LLC for each property
- What is a Land Trust?
About Our Guest
Clint Coons
Clint Coons is a founding partner and Manager of Anderson Advisors and Law Group, the nation’s premiere provider of asset protection and tax planning services for real estate investors. Clint has taken what he has learned through his own investing, and coupled it with his experiences representing some of the country’s best real estate investors, and provides this knowledge to anyone interested in learning how to properly structure their real estate investments.
More About Clint
- Influenced by real estate as early as 4 years old – his dad was an investor
- His dad would buy homes for a $1, tear them down and re-build
- Clint was in construction during college – a framer – and didn’t see himself doing that job forever
- Decided to go to law school (his grandfather was a lawyer)
- His dad stopped investing when Clint went to law school
- Out of law school, opened Anderson Advisors law firm with partner Toby Mathis
- Clint is a real estate investor with properties in 7 different states
Clint’s Approach to Law
- Focused on asset protection
- Had many real estate investor clients
- Attorneys can take something simple and make it complicated
- At Anderson he wants to make sure all clients understand all aspects of what they are doing
- Wants people to do things on their own if they want
- Combined this approach to their knowledge of real estate investing
- 19 years practicing law
- Over 80 employees
- Tries to create a protective shield to prevent people from loss
- He has expanded from legal services only to now include tax services, integrating the two for maximum benefit for your business
What is an LLC?
- Definition: Business entity formed under a particular state where you are buying the property
- LLC stands for Limited Liability Company– not Limited Liability Corporation
- Designed to limit your risk exposure from an agreement
- It’s like a corporation in that YOU are not liable, the entity or organization (company)is
- “Whatever happens in the box, stays in the box” – if there is any liability it stays in the box
- It protects you personally from the liability of owning property
- It also, if you set it up properly, protects your assets from your liabilities
When do you set-up an LLC?
- If you are financing and using traditional funding most lenders will ask you to put your name on the title. But you should open an LLC first and try to open it in the LLC name.
- If buying for cash, open the LLC first and make your offer in the name of the LLC
What are “charging order protections?”
- If you get sued in a state with “charging order protections” the judge cannot take your LLC from you
- They can become a lien holder at best but even this is rare
- What if the state you are buying your property does not have good “charging order protections?
- Then you can set-up a “holding LLC” – this an LLC that can be opened without your name on it (Nevada and Wyoming allow this) that is a shield that will hold the LLC from the state where your property is located
- Serves as a blocker or anonymity shield between your creditors and your assets
- Control everything but appear to own nothing
Do you need a separate tax return for each LLC?
- LLCs don’t need tax returns
What are the costs associated with LLCs
- $1,500 to $10,000 for attorney to set up the LLC
- State costs (in California it $800 a year)
- If you have many properties in states where it is expensive to maintain LLCs
What is a land trust and when would you use one?
- You can set up your properties each in a separate land trust, instead of separate LLCs in that state, and have each of the land trusts owned by an LLC in Nevada or Wyoming
- No asset protection (except in Florida)
- The cost – $0 annual maintenance
How can people reach Clint?
- AndersonAdvisors.com
- Request a free consultation
To learn more asset protections
- Go to his YouTube channel
- Over 80 videos
- His book: Asset Protection for Real Estate Investors by Clint Coons
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