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LLC

Contrarian RE Fund 1, LLC Introduced as Investment Opportunity in Distressed Real Estate Assets

February 28, 2023 by Realty411 Team

Real estate veteran and turnaround specialist James King has introduced a real estate investment fund, providing people with the opportunity to invest in distressed real estate assets. The Contrarian RE Fund 1, LLC, researches, identifies and acquires multifamily and manufactured home communities that are being sold at steep discounts.


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“These opportunities are beginning to present themselves as more distressed assets are coming online and property owners are struggling with increased debt,” said King, who along with his team of professionals has successfully owned and operated more than 2,000 units across the United States. “We are actively identifying distressed real estate assets and reviewing if they are viable options for our “Value-Add” business model. If they are, we are making purchase decisions regarding the properties and investigating the level of enhancements and improvements that need to be made for each property.”


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The Contrarian RE Fund 1’s “Value-Add” business model has realized significant profits since King first started implementing it in 2009. By purchasing properties with low rental rates and making substantial physical and operational enhancements that improve both the property and resident experience, King has been able to consistently achieve higher rental rates and refinance initial capital investment.

More information regarding the Contrarian RE Fund is available by contacting James King at KingCommunities.com ([email protected]).


Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Filed Under: investing tips, LLC, news Tagged With: Contrarian RE Fund 1, distressed real estate assets, James King, King Communities, LLC, real estate investing, real estate investing tips, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth

LLC for Real Estate Investing

March 1, 2022 by Realty411 Team Leave a Comment

Image from Pixabay

By Stephanie Mojica

A critical step for new and existing real estate investors is to form an LLC or Limited Liability Company. In the simplest of terms, an LLC protects an investor’s personal assets — whether those are cash, bank accounts, or personal property.

Whether the investor is into flipping houses or being a landlord, an LLC ensures that the person himself or herself does not actually owe any debt. The company is responsible for any contracts, debts, lawsuits, leases, and liabilities.

If business goes bad, the people and companies that believe they are owed money can only pursue the LLC — not the individual(s) behind the company unless fraud or another crime was involved, according to Yahoo! Finance.

However, there are some critical steps to take even after a real estate investor forms an LLC. Any properties must be purchased in the company’s name, not an individual’s name. This ensures the ultimate protection.

If someone buys a home to flip or rent out and ends up owing more on the mortgage than the property is worth, the bank cannot come after the individual if the home is officially owned by the LLC.

Image from Pixabay

A caveat is that many banks do not want to issue mortgage notes to a new LLC, because it’s risky for them. That’s why a business plan is so important. (See our past article “House Flippers Need a Business Plan” for a more in-depth discussion on this topic.)

Other potential drawbacks to an LLC come at tax time and when an individual transfers assets to it, so an attorney is probably a necessary resource, according to LegalZoom.com. Also, each state has different laws regarding an LLC.

However, done properly, an LLC seems to have more benefits than downsides. Other good news is that the costs are usually minimal. As always, before making any major decisions in such areas speak to a qualified real estate attorney.

Sources for this article:

https://finance.yahoo.com/news/form-llc-real-estate-investing-194323289.html

https://www.legalzoom.com/articles/forming-an-llc-for-real-estate-investments-pros-cons

http://reiwealthmag.com/house-flippers-need-a-business-plan/

Filed Under: LLC Tagged With: LLC, real estate investing, real estate investor, real estate magazines, real estate wealth, realty 411, realty magazine, realty411, rei magazine, rei wealth, REIwealth, Stephanie Mojica

Maximum Asset Protection – Tips and Information

August 10, 2020 by Realty411 Team Leave a Comment

By Kathy Kennebrook (The Marketing Magic Lady)

A Discussion on the Importance of Protecting Your Assets

Throughout your life, no matter who you are or how you earn your living, you need to be concerned about protecting your assets. Your assets may include your home, vehicles, jewelry, boats, artwork, properties and whatever other assets you accumulate along the way.

After all, you work hard for what you have and there are always going to be people out there who want something for nothing. The more money you have the greater a target you become, and you’ll want to protect yourself from frivolous lawsuits.

In the real estate investing business this is especially true. The real estate business is one of those where you will be piling up assets quickly. If you are holding properties and you have tenants or tenant/buyers in your properties, this can make you an even bigger target for possible lawsuits.

For this reason alone you want to be holding your assets in another entity, such as a land trust in order to keep your name off of public record. The main advantage to purchasing properties in land trusts or other entities is anonymity.

If everything you own is in your own name, it makes it easy for someone who wants to sue you to find out what you have. If a plaintiff’s attorney looks on public record and it appears that you have nothing, you are much less likely to be sued.

If you are holding properties in land trusts, corporations or LLCs this prevents your name from showing up on public records; making it appear that you don’t personally own anything; and that is the whole idea. You want to hide your assets from creditors and predators. There are a lot of people out there who want what you have, but they don’t want to work to get it.

As you begin to grow your real estate business, you need to begin thinking about protecting yourself and your assets along the way. Make sure you begin working with a reliable real estate attorney who can help you grow and protect your business.

Make sure they understand the importance of purchasing properties in land trusts or in entities that do not represent you personally. If they don’t want to do things your way, find someone who will.

In addition, you want to be thinking about placing other items of value that you own, such as bank accounts, jewelry, vehicles, boats or artwork in property trusts. This will protect these assets from showing up should you be sued for any reason.

You also need to be working with reliable a financial planner and a CPA in your business in order to protect you assets by investing them well with a diverse portfolio. Your CPA will also help you hold on to your assets by finding ways for you to legally pay fewer taxes on the income from your business.

The real estate business is one of those businesses where there are a lot of great tax deductions for you if you structure your business correctly. You also want to think about diversifying your assets so that you don’t have all your “eggs” in one basket. As the markets continue to fluctuate this becomes even more important for protecting your assets.

Your CPA and your financial planner can also help you structure your assets so that if something happens to you, your assets will be distributed to children, grandchildren, charities or whomever you choose in a way that is fluid with the least amount of taxes and stress.

This way there is no question as to how the distribution of your assets will be handled if something were to happen to you and this can save your family a lot of hassles later on.

Protecting your assets while you are still around to enjoy them is going to be very important to securing a future for you and your family.


For more information on asset protection and all other aspects of real estate investing, visit my website at www.marketingmagiclady.com.


LEARN DIRECTLY FROM KATHY KENNEBROOK AT REALTY411’S VIRTUAL WEEKEND INVESTOR EXPO, CLICK HERE!

Filed Under: LLC, news Tagged With: LLC, marketing magic lady

Spinning Your Wheels

February 19, 2020 by Realty411 Team Leave a Comment

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Filed Under: experts, LLC Tagged With: LLC

Empire Industries, LLC…Your Partner in Investing Success

September 30, 2019 by Realty411 Team Leave a Comment

By Kevin Davidson

After his job was threatened by the aftermath of 9/11, Steve Rozenberg, co-founder of Empire Industries, LLC realized that obtaining financial freedom through investing in property is a much surer way of building wealth than working for someone else.

“I’m an airline pilot by trade,” said Steve. “I fly for a commercial airline, and so after 9/11 hit, I was on the verge of being out of a job. That’s when I realized that I needed to do something else to earn money because that secure job didn’t look quite as secure as I’d thought.”

“So what I did is, I started learning everything I could about real estate. I started trying to understand it. I read a book a week on real estate and I devoured as much information as I could so I could figure out this new society…this new language that I was engulfed in.”

“Then I started buying some houses. I sold a few houses then ended up buying an apartment complex.  I sold the apartment complex and started buying a bunch of low income property, which is probably my biggest mistake.”

Steve met Pete in 2005 and the two began flipping houses together before switching to a buy and hold strategy. Then, after buying twenty low income houses within a year and a half, the two realized they’d made a mistake.

“We realized why we shouldn’t have done that. All of a sudden we had a huge waterfall of problems attacking us from all angles so we did what any normal male would do, we turned around and bought another 15 properties to try to fix the problem, which really just ended up being like gasoline on the fire for us. It just ended up making our problems ten times worse!”

The solution they created for their problem became Empire Industries, LLC.

“So to solve the problem we’d gotten ourselves into, we had to create a management company of our own, just to manage our own properties.”

“This is how the management company got started. We started it out of necessity, from the result of making our own mistakes of buying the wrong properties, but also figuring solutions out for that.”

Investor solution

Today, Empire Industries, LLC is the fastest growing single family management company in Texas. They manage about 750 properties in Houston and Dallas, and have a client base that spans the globe. Investors from California to Japan use Empire Industries for their property management needs.

“We’re the number one referred management company by realtors,” said Steve. “We give referral fees to our agents and we make them look good. At the end of the day, what an investor wants is a property that is going to make them money and not give them a headache.”

“Empire Industries is a full service property management company. Our services run the gamut, from helping people find properties to managing their investments, we do it all from an investor’s perspective. Because we’re active investors ourselves, we’re looking at the market from that mindset. We are in the business of helping investors find properties that match their goals.”

“Often, beginning investors fail to see results because they don’t have policies, procedures and structures in place…they run it off of emotions, not a business model.”

“What I always tell people is that when it comes to owning a rental property you own a business. Whether you have one or fifty properties, you run a business. Fair housing, discrimination…all of these laws that dictate what you do as a landlord say that you’re a business and the only one that does not realize they’re a business is the owner.”

Investors choose Empire Industries, LLC because they’re more than a property management company. As active investors, the founders are in “the heat of battle of owning properties.”

“We look at it from an investor’s perspective,” said Steve, “as a partner, not as just a customer/client relationship. This means our goal is to help them be successful and to reach their financial goals, whatever those goals may be.”

Investor education

From hundreds of free videos to free ebooks, investors have access to a huge resource of information…for free…from the team at Empire Industries, LLC.

Ask any savvy investor and they’ll tell you…learning as much as possible about investing in property is key to achieving success.

“Most importantly, have a plan,” said Steve. “If you don’t have a plan and you don’t have goals you need to talk to someone like myself and figure out what your goals are so that when you’re trying to find a deal you can know what that deal is, based on your goals.”

 

Filed Under: LLC Tagged With: LLC

Armor8TM LLC Protection Uses Overlooked Legal Code For Your Benefit

September 27, 2019 by Realty411 Team Leave a Comment

By Garrett Sutton

Holding LLC Certificates in Wyoming for Superior Asset Protection

You want the best protection possible for your assets. You want to use the strongest LLC entity available. But if you live in a weak asset protection state (like California) and set up your LLCs in a strong state (such as Wyoming) which state law applies? In an outside attack where a car wreck victim has won in court and is seeking to collect, the old standard lawyer answer is: It depends.

If you live in California and hold your Wyoming LLC membership interest (your certificate representing ownership) in California, that certificate is your personal property in California. Your Wyoming LLC can then be subject to the jurisdiction of a California court. In such a case California’s weaker laws will apply.

However, with some careful planning and by actually holding the physical Wyoming LLC certificates in Wyoming, the stronger asset protection of Wyoming law can apply. (Please note that we will use California and Wyoming in our discussion but any weak state/strong state scenario will apply.)

A membership interest in an LLC may be held in two ways: (1) as a certificated security; or (2) as an uncertificated security. A certificated certificated security is a declared ownership interest (like a corporation’s stock certificate) represented by a properly prepared and held certificate. An uncertificated security is an ownership that is not represented by a properly prepared certificate. See, UCC 8-102(4), (18).

  1. Uncertificated Security.

Most membership interests in LLCs are held as uncertificated securities. Indeed, a membership interest in an LLC is not a security, unless its terms expressly so provide. See, UCC 8-103(c).

One downside to holding an LLC as an uncertificated security is that it usually is considered by the courts to be a “general intangible.” The courts see the LLC ownership as accompanying the owner of the uncertificated security. A court has jurisdiction over an individual if they live in the court’s district. Personal jurisdiction means the court has the ability to assert orders against the individual. Thus, if a court in California has personal jurisdiction over a judgement debtor (someone who lost in court and for purposes of example we will call “Bob”), then the court in California also may have in rem (property) jurisdiction over Bob’s Wyoming LLC. This is true even though his LLC was formed in Wyoming. Bob’s LLC membership interest is deemed to be “intangible personal property” that accompanies him in California. In this way, an uncertificated security representing a Wyoming LLC membership interest can be subject to California’s weak laws. When Bob is served in a California collection case, a California court not only acquires personal jurisdiction over Bob but all of his California holdings as well, including uncertificated securities even if his LLCs were formed in Wyoming.

Neither Bob nor you wants this result. Let’s consider a better alternative.

  1. Certificated Security

There are distinct advantages to holding a membership interest in an LLC as a certificated security.

One definite advantage is that Bob’s interest in a certificated security may be reached by a judgment creditor only by actual seizure of the security certificate by the officer making the attachment or levy. See, UCC 8-112 (a). Thus, in dealing with certificated securities, possession of the securities is the vital matter. Placing them in a Wyoming safety deposit box, a service we provide, puts the certificates out of the easy reach of a California (or other state) court.

Furthermore, the local law of the jurisdiction in which a security certificate is located at the time of delivery governs whether an adverse claim can be asserted against a person to whom the security certificate is delivered. See, UCC 8-110 (c). Delivery of a certificated security occurs when the purchaser acquires possession of the security certificate. See, 8-301 (a)(1).

Therefore, if Bob acquires possession of a security certificate in Wyoming, then delivery of the security certificate occurs in Wyoming. As such, the law of Wyoming (the jurisdiction in which the security certificate was located at the time of delivery) governs whether an adverse claim can be asserted against Bob. In this way, even if Bob is served with process in California, the California court may apply only those stronger remedies against Bob’s Wyoming LLC membership interest that exist in Wyoming, and not those weaker remedies that exist in California.

Thus, if a charging order against Bob’s LLC membership interest is the exclusive remedy in Wyoming, a California court must apply Wyoming’s superior law to the case.

Our firm has developed a method for certificating LLC securities in Wyoming to be governed by article 8 of the UCC so that Wyoming law applies. We call it “Armor 8”. We add specific jurisdictional Article 8 language to the Operating Agreement and the membership certificates. We hold the membership certificates in a safe deposit box at a Wyoming bank. Your certificates are physically located in Wyoming and governed by Wyoming law. We have not had a case challenging this procedure and can make no guarantees as to how any one court would rule. But by taking the extra steps here you are in a much better position to argue the applicability of Wyoming law, to your greater protection.

The cost of our Armor 8 service is very affordable. The setup fee is $95 and annual holding fee for 1 to 7 certificates is $75. To get your certificate out of the Wyoming safe deposit box and returned to you (for reissue or any other reason) the fee is $50. To place the certificates back in the safe deposit box the fee is also $50.

If you start a new Wyoming LLC and want our special ‘Article 8’ language included in your Operating Agreement and on your membership certificate there is no extra cost if you are using our certificate service.

If you want to amend your Operating Agreement and LLC membership certificates to include the Article 8 language so you can start using our service the minimum fee is $295. Prices may be higher due to the complexity of the Operating Agreement and the number of certificates to be reissued.

Now you can better protect your LLC by keeping ownership certificates in Wyoming. Call Corporate Direct at 1-800-600-1760 to get started with your Armor8TM protection.


 

Garrett Sutton

Garrett Sutton is an attorney, speaker and best selling author. As part of Robert Kiyosaki’s Rich Dad’s Advisor group he has written six books which have been translated into 11 languages. Garrett focuses on corporate and asset protection law and speaks to audiences on the importance of asset protection. His advice is pertinent, timely and valuable.

Garrett received his Juris Doctor Law Degree in 1978 from Hastings College of the Law, the University of California’s law school in San Francisco. He received a B.S. in Business Administration from the University of California, Berkeley, in 1975. He is licensed to practice in Nevada and California.

Website: http://www.corporatedirect.com/

Filed Under: LLC Tagged With: LLC

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