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SHOW NOTES FOR EPISODE 150: ASK BILL! HIGH NET WORTH INVESTORS-NO RETIREMENT MONEY-WYOMING LLCS AND ASSET PROTECTION
Where do you find high net worth investors? What happens if you don’t have any funds when you retire? How do you use LLCs, especially a Wyoming LLC, to best protect your investment properties? In this episode of “Ask Bill,” Bill addresses each of these questions and shares how, when you utilize the right strategies, it can result in significant benefits and revenue for your real estate investing ventures.
This is our monthly segment where Top Dawg Bill Manassero answers some of the real estate investing questions received during the month from emails, in person conversations, phone calls or through online portals such as BiggerPockets.com and Quora.
Question #1 – What are the most effective strategies to identify, market, and close deals with high net worth individuals in real estate?
I personally believe that the best way to close deals with High Net Worth Investors is by being a person of high integrity, strong moral convictions and to create a verifiable track record of successful real estate projects. It’s that simple. Be the kind of person YOU would want to invest YOUR hard earned funds with. Seriously, a person’s character is foremost to me. I need to know that a person is honest, forth right and beyond reproach. If you can meet that criteria – the same high standards that you would hold if you were in their shoes — I believe, High Net Worth Investors will seek you out! That, by far, is the best way to build those relationships.
Regarding the other part of your question, on how to identify and market to High Net Worth Individuals, here’s a little tip. There are High Net Worth Investors who are always looking for real estate deals and they can be reached through “family offices.” A Family Office is an exclusive wealth management firm that usually only accepts clients with $10-25 million in investable securities and they spend more time with each client and spend time assisting with things like tax optimization, estate planning, charitable giving, business transfer, wealth transfer between generations, philanthropy, even ongoing insurance issues as well. They charge a premium to their clients but handle everything related to wealth management and act as advisers and consultants on all financial matters. There are only 2-3,000 family offices in the U.S. but they control a massive amount of wealth. Average client size: $30-50 million. They are basically accountants and are often CPAs or investment experts that represent wealthy families like the Mark Cuban’s or Larry Ellison, etc. (individual families with $100 million and up net worths).
I had a podcast interview with the founder and CEO of Family Office Club, Richard Wilson. The Family Office Club is an organization that represents the people who run these family offices for different families. They hold regular meetings, conferences and even specialized events geared to real estate investing, Angel funding or commodities. In my interview with Richard Wilson, he shares how you can gain access to this elite group to present your real estate deals. To listen to the interview go to the Old Dawg’s website at olddawgsreinetwork.com/blog and look for episode #: 015: Where to Find $100 Million Net Worth Investors.
But again, I can’t emphasize enough, if you want to do business with someone you meet at a Family Office event, you need to be the kind of person YOU would want to handle YOUR money!
Question #2 – What happens to old people who don’t save up for their retirement?
Not being prepared for retirement can be an ominous situation. I know because I have first hand experience. At 60 years of age, I was unemployed, had a little money tucked in an IRA (but certainly not enough to sustain me throughout my retirement years) and had to do something fast. I started evaluating my options, but, unfortunately, my options were few and far between.
Retirement is one of those things (like traffic tickets, taxes and car maintenance) that you can try to ignore but will always come up to bite you when you least expect it.
When I came back from Haiti after being in the mission field for 11 plus years, I looked at getting a job (very few prospects), starting a business (my best bet) and social security (not much, and I had to wait until I reached 62)… and
By the grace of God, I received an unexpected small inheritance check. I thought of investing in for interest income but, with most conventional investments, would not yield enough to make much of a difference in my daily living expenses. I ended-up looking into buying rental properties and decided to invest in three small out-of-state properties in the South (where you can buy a house for $30–50,000). The homes were already fixed up and had renters. The next month, I started receiving rental income checks. I couldn’t believe it! The three properties brought in close to $3,000 a month in rental income!
I began reading, listening to podcasts, attending webinars and researching online to find out more on real estate investing.
I decided to leverage the properties I had to purchase other properties and eventually ended up setting the goal to acquire 1,000 units by 2020. I wanted to not only make sure I could get through retirement comfortably but I also wanted to leave a legacy for my kids.
I currently have 28 units and I’m looking to buy a 100 unit apartment next. My goal is to double the number of units I have each year until 2020.
I knew nothing about real estate investing when I first started, other than the home I bought for my family. I now love what I do, am keeping my mind active, and even launched a blog and podcast called the Old Dawg’s REI Network (and I don’t sell anything) to teach other seniors how to do the same thing.
Now, not everyone can hope to receive an unexpected inheritance check in the mail but maybe you have equity in your home, a savings account, someone you can borrow from or some other source of funds to get you started. You see, at $2,000 a month in rental income, it won’t take long to replenish what you invest.
I won’t pretend it’s the perfect “get rich quick” secret. In fact, quite the contrary. It requires a lot of hard work to get started. But if you are willing to get educated, roll-up your sleeves and work hard for a few years, it can be the solution for those of us procrastinators out there who didn’t prepare properly for retirement.
If you want additional information on why I shoes real estate investing, there is a podcast I recorded that explained 10 reasons why I choose real estate investing: 140: 10 Reasons Why I Started Investing in Real Estate in My Sixties
Question #3 – Thanks so much for your great podcast! I’m just getting started in RE investing and am under contract for a single family home in the Midwest. I live in CA but am planning to set up an LLC in Michigan where the property is. I’ve heard on from other sources that I can set up a holding LLC in Wyoming for the MI LLC (and any others I may create out of CA), but I’m wondering if I need to set up an LLC here in CA (pay the $800 +) per year. What do you do? Any other thoughts? Thanks, Josh
First off, congratulations on your investment property purchase!
I too live in California and purchase investment properties out-of-state. However, before I answer your question, please note: I am not an attorney and the best advice should come from an attorney familiar with LLCs and asset protection laws. My attorney is Garrett Sutton who was guest on my show (see episode #011) who wrote an excellent book on this subject entitled “Start Your Own Corporation.” He is also part of the Rich Dad organization and works as Robert Kiyosaki’s attorney.
The way I work with my investments is I opened a Wyoming LLC as my main holding LLC. Why Wyoming? Well, both Wyoming and Nevada maintain your LLCs without publically listing your name. Wyoming has lower annual fees than Nevada. My Wyoming LLC is registered in California and I pay the $800 annual fee.
When I purchase properties in other states, I open an LLC in that state and that LLC comes under my Wyoming LLC. In addition, I have established a Family Living Trust and the Wyoming LLC comes under my Family Living Trust. That way, not only are my personal assets protected from lawsuits associated with my properties but, should I pass away, all of my assets will go directly to my heirs and not be subject to the ridiculous California probate taxes.
Garrett Sutton Podcast: http://olddawgsreinetwork.com/011-protecting-your-real-estate-assets/
Another great podcast on LLCs from attorney Clint Coons: http://olddawgsreinetwork.com/053-why-real-estate-investors-use-llcs/
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