Zero Loss Real Estate Asset Protection Strategy (Reduce Risk with Friendly Liens)

You might have heard someone tell you, "If you're going to set up a limited liability company, why don't you put four properties into one LLC." If you've watched any of my other videos that I've produced, you'll know my take on this. If anything goes wrong with any one of those properties, what's at risk?
Watch this short video to learn asset protection strategies that will prevent any losses from your real estate investing.
Questions or requests for a video topic are always welcome!
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#AssetProtection

[@ClintCoons]

Learn about Real Estate & Asset Protection from Clint Coons, Esq. and Toby Mathis, Esq. at our next all-day free Livestream 9 am to 4 pm PT. on Saturdays. Our attorneys and specialists will answer ALL questions: 👉 Save Your Seat: aba.link/683d6d

[@ciprodriguez]

THESE VIDEOS ARE FREAKING AMAZING! THANK YOU

[@schickmann]

Thankyou clint. You have become my teacher. I am coming to las vegas when you start having seminars

[@passivesolar6194]

Phenomenal job Clint! Exceptional equity stripping strategy. We've always used the power of a lien from one of the GC companies we own but this is even better.

[@ClintCoons]

Thanks

[@CaptKarlack]

Man, what I would give to have someone like Clint doing such a great job teaching but for Canadian policy.

[@ManuelGarcia-mt6oo]

We are happy to defend you on both sides was a good one :)

[@Qtone808]

Once again great job Clint. I will be calling your firm very soon to set up these similar strategies!

[@ClintCoons]

Excellent!

[@todanator]

I'll be using you guys in the future

[@hectorrodriquez8785]

Brilliant!!!

[@Zenas521]

Preventive maintenance is the best maintenance. Sounds like a winner.

[@derekstalhut2193]

Awesome Thank You !

[@ClintCoons]

You're welcome!

[@Iwouldgotojail]

This man is doing gods work!

[@ClintCoons]

Thanks

[@juansanchez7769]

WoW 🤩 Genius

[@billturner1960]

Wow!! Great stuff!! Keep up the great work!!

[@ClintCoons]

Thanks so much!

[@billturner1960]

@@ClintCoons You bet. Will be in touch with you early March on an estate settlement. Looking forward to it. Thank you again and wishing all of you and yours a very safe and Merry Christmas. Kind regards, 🎄

[@AD66Liberty]

With debt money, I.e. fiat Fed notes, a promise to pay is money. Your signature on the DOT creates the money out of thin air. No fraud at all (other than our banking andmonetary systems)

[@trendstarrealty6345]

If properties are deeded to a Series LLC (Parent), then transferred to one of the Cell LLCs (as recommended in another video), would the Cell/Series LLC be the borrower on the LOC, or would the Parent LLC (sole Member) be the borrower? Awesome strategy BTW! Thank you!

[@robertdema]

You need to say how to handle some of these strategies on your tax returns.

[@myuniqueunicorn]

Amazing

[@ClintCoons]

Thanks

[@Eric_In_SF]

This is sinister and amazing at the same time. That’s why I called Anderson

[@ClintCoons]

Thanks

[@releon5696]

i have a question can a non US resident/citizen foreigner create a LLC to his/her real estate investment in the US? thanks

[@Tykoon25]

Wow!!!!!

[@michaelagins3503]

Clint. Great video. Brilliant and simple strategy. Few follow up questions: (1) On the PN, it would be wise to have actual terms - rate payment etc, correct? I understand it’s just a smokescreen. I can release my own lien at some later date. (2) Can the holding LLc granting the PN be in the same state as the property LLc or is there some specific benefit to the WY Llc or Deleware LLc? Thanks

[@ClintCoons]

Yes you would have terms in your PN and if you actually borrow the money you would want to pay it back per the terms of the note. I recommend using a WY LLC because WY offers privacy so a third party looking at the lender (WY LLC) will not associate it back to you.

[@lebarre1000]

LOL youre a sly dog....I love it :)

[@ClintCoons]

😂

[@aquagem2525]

Thanks Clint, another great strategy! But how will this affect my asset/liability ratio or qualification for a loan if I want to refinance or purchase additional rental properties?

[@ClintCoons]

It won't because you will not report yourself to the credit bureau.

[@yuliya212]

@@ClintCoons But you need to disclose this lien to the mortgage broker/lender when filing the loan application, otherwise its a mortgage fraud, isn't it?

[@ClintCoons]

@@yuliya212 Not sure we are on the same page. The loan is with your own entity, not a 3rd party. Second, you will not have borrowed any money so you do not have any debt to disclose on a financial statement.

[@Harindra000]

@@ClintCoons Oh Noooo! I need some water!

[@alpinewhite]

Once this friendly lien has been set up, I suppose we can suggest to the future refi lender that the note holder for the friendly lien is willing to subordinate. That would not help one's debt-to-income ratio but, at least, the new lender will be in first position. Would that be another avenue?

[@markol8401]

Thanks for all this valuable information. I set up a WY llc and I am about to set up my WA llc for a rental property, the member manager will be the WY llc and I am the manager of the WY llc. The only question I have is with the EIN , when I apply for it , I have to enter my personal information , does that affect or impact the ownership of the llc will I still be protected?

[@ClintCoons]

No it does not. Interesting, I just cut a video today on exactly what you are describing. It should be release next month.

[@markol8401]

Thank you for sharing your knowledge and the great advice.

[@lesallison]

Great videos Clint. Thank you. I have a few questions. Who signs? Or even better. How do you sign? A contract or HELOC agreement. Please make a video on who signs and how do you sign and why do you sign the Texas LLC, Wyoming LLC and Land Trust agreements and HELOCs. I ask this, because we are, I am, in some ways, representing both sides of contracts. More importantly, I don't want to give the litigant or opposing lawyer or court the impression that I am the owner of anything. Kindly, dumb it down and really be specific. Also, am I signing as the Member, Manager, Organizer of the LLC?

[@ClintCoons]

Great idea. I will work on it this week.

[@amarn9624]

Thanks Clint. But doesn't it cost thousands of dollars to record a promissory note and mortgage?

[@miker8527]

I laughed so hard. We will be glad to take your money representing you in the lawsuit against yourself as we defend you against you in your lawsuit. I just cant stop laughing.

[@Currygoatpapi]

Question. Should you set this up before u actually buy Properties or after ??

[@ClintCoons]

Depends if you can close in the LLC. If the lender will not allow closing in an LLC then you can set it up after you acquire the property.

[@uhohotdog3483]

Just Wow ... Brilliant has nothing on you Clint 😜

[@ClintCoons]

Thanks.

[@uhohotdog3483]

@@ClintCoons I have a phone consult with your staff on the 9th of Nov ... I hope I can afford you 😃

[@kristianlund1907]

Would you use the WY LLC you set up for the specific purpose of acting as trustee on your land trusts to also create the friendly lien against the rental LLCs? Or would you use the WY Holding Company that owns the rental LLCs? Or would you create a 3rd (!!!) WY LLC for the specific purpose of friendly liens?

[@ClintCoons]

Use the holding LLC. No need if using land trusts to create a 3rd Wy LLC for the friendly lien.

[@alpinewhite]

@@ClintCoons But isn't the Holding LLC the member/owner of the LLCs for the rentals and principal residence? Maybe it's ok since nothing is recorded who the members of the individual LLCs are. Is my thinking correct?

[@BruceLeroy69]

I'm concerned because Ohio's Residential Mortgage Lending Act (RMLA) does not exempt investors from mortgages that are required to be made and/or serviced by licensed lenders. I've not heard of it happening, but even if the local DA refuses to prosecute the state can do so for lending money to myself.

[@black2burn211]

Great Video thanks! Does this plan work with VA loans/mortgages as well?

[@ClintCoons]

Not sure

[@black2burn211]

@@ClintCoons no worries. I know with VA loans you can rinse and repeat as long as you spend one night in the house in the first 30 days. if/when I find out about operating agreement/LLC implications I'll reply with an update. cheers.

[@ClintCoons]

@@black2burn211 Awesome.

[@tabs3024]

Do I need a business account for each property that I'm creating an LLC for?

[@ClintCoons]

It really depends on how you manage the rental income and your bookkeeping skills. The best course of action is to always set up a bank account for each LLC.

[@jasoncharlton3775]

Does this still work if the WY LLC owns the property LLC? Or should it be a WY entity that doesn't own the property LLC.

[@ClintCoons]

WY entity will own the property LLC. a separate WY LLC will place the friendly lien.

[@btd8311]

Can you apply the same concept for cash in the bank? Thx

[@ClintCoons]

Best to place your savings in a WY LLC for asset protection.

[@oshi135]

Can something similar to this be done without putting the rental property in a LLC?

[@ClintCoons]

No because the owner is ultimately liable. Remember this is just a smoke screen. If the creditor persists then you will want the LLC.

[@JWW10666]

Can this strategy be used for other assets such as securities?

[@ClintCoons]

Possibly. If you want to protect liquid assets then you would use a UCC-1 financing statement recorded against the entity holding the securities. Keep in mind this is just a smoke screen and the purpose of the friendly lien is to deter tenants from bringing frivolous lawsuits. Wit securities if all you are doing is trading then you do not have any threats from inside of the LLC only external e.g., personal lawsuits. The LLC will provide you protection from external threats so without other activity inside of the LLC e.g., trucking business, pilates studio, etc., a UCC-1 isn't really needed. All you need is an LLC or statutory trust to protect the assets.

[@irenehernandez6688]

What if it's a R v park ? Do I set up a llc for each spot. ?

[@ClintCoons]

Not a lot of liability with that so probably overkill.

[@mimin4084]

Can you do that with credit card debit if you had this to company’s and make creditors run like that?

[@ClintCoons]

CC debit is unsecured and typically not reduced to judgement thus, do they look to your assets for recovery.

[@fojura22]

Hi. What about documentary stamp tax? It’s due on any recorded lien, mortgage or any indebtedness.

[@ClintCoons]

Absolutely this is why you should check with a professional before using this strategy. I am thinking you possibly invest in Florida. This is a strategy that I typically do not use in FL because of the doc stamp tax.

[@saltypeter7414]

@@ClintCoons so is there an alternative? Is there a link for that strategy? Thanks!

[@ClintCoons]

@@saltypeter7414 Can you provide me the time on the video relating to your question?

[@saltypeter7414]

@@ClintCoons sorry, in reference to using this strategy for “friendly liens” in FL as it would cost around $700 per 100k in doc stamps. What’s the alternative? Thanks!

[@ClintCoons]

@@saltypeter7414 Correct you can not use this strategy in Florida because of the doc stamps. Not sure of anything comparable to hide the equity.

[@joeybez5464]

BUT THERE ARE LEVELS ON WHO GETS PAID FIRST ON THE LIST OF PEOPLE OWED OF LEINS , SO SOME ONE MIGHT SAY OR THINKWILL BE FIRTS TO GET PAID LIKE THE IRS OR ORIGINAL LENDER OF DOWN PAYMENT

[@bl1tz78]

Does this mean that the WY LLC have to pay taxes since the IRS/State would assume that the HELOC would generate interest income?

[@ClintCoons]

The LLC is pass through. All of the income flows onto your 1040. The LLC does not pay any tax on the income. Further, you are not paying any interest on money you did not borrow. The HELOC is a lien but it is not being used. Does this make sense?

[@miker8527]

Wow, just wow. I would have never thought of that for my investment. I have seen fortune 10 companies loan sister companies money like this scenario. I thought it was to reinforce the sister company financially. In a way it was financially reinforcing the sister company to be in debt to the main company so they get first dibs at dismantling the company assets if necessary. But they did one thing different. They actually gave up the cash to the sister company. Then had sister company paying debt back in stock and cash. They basically loaned themselves money and paid themselves back slowly. At the same time they get free stock taking greater control of the sister company. Micro macro Macro micro. How can a bank/loan holder that has a lein against an LLC be sued?

[@ClintCoons]

It wont unless it is engaging in other business activity

[@TravisCreighton]

How about building up negotiated lines of business credit such that you can fund your lending LLC to accomplish your strategy with proof of funds. You'd only need to utilize the funds for a short amount of time during their discovery, I'd think.

[@ClintCoons]

I have seen many fake proof of funds letters sold by real estate educators. This would amount to mortgage fraud. If you are describing real credit that you can actually use then this could help but then it will depend on the type of real estate your are looking to purchase.

[@TravisCreighton]

@@ClintCoons thanks for the heads up. Just getting started absorbing everything out there. This warning is much appreciated.

[@thefrugallifehacker1225]

I like you zero loss strategy. Question about it. Why have a LLC can't you do the same thing without the LLC with your family member?

[@ClintCoons]

There may be some risk if the family member is sued and a creditor looks to the notes (loans) as recovery. Yes you will argue money never changed hands but the creditor would argue you are lying and trying to hide assets for your family member.

[@thefrugallifehacker1225]

@@ClintCoons thank you. That clears it up.

[@terrycrawford6740]

If this strategy is in place, it seems that we no longer need Land Trusts, Partnerships, in-state LLCs, holding company LLCs, etc. What am I missing? Maybe still have Land Trusts for anonymity but not much else, right?

[@ClintCoons]

No you still need the other. This is just a smoke screen. It would be a mistake to rely solely on this strategy to protect your assets.

[@cskipper65]

I am sure he has covered this in other videos but it isnt possible to put homes in an LLC when its being financed most of the time. Also i didny hear anything about an additional landlord insurance policy. This seems like a complicated and expensive way to protect yourself.

[@ClintCoons]

Absolutely. Yes, the transfer will violate your acceleration clause in most mortgages but banks rarely enforce this clause in my experience. Typically the borrower defaults on the note and then the bank steps in.

[@kristianlund1907]

This would also be why Anderson helps you set up land trusts to transfer properties around between yourself and LLCs via assignment vs. transfers. It is part of the system and works very well.

[@jonnyroxx]

Where can I get more information on this strategy?

[@ClintCoons]

Have you scheduled a strategy session with someone in my firm. See the show notes for a link.

[@freechurchpress3571]

How do you incorporate this strategy with a private Trust. Put WY LLC into the Trust???

[@ClintCoons]

You would file a lien against the real estate held in the trust.

[@freechurchpress3571]

@@ClintCoons Thank you so much for responding. Your channel is extremely valuable.

[@daughterofthecreator2585]

@@ClintCoons Thanks for answering this question, I wanted to know the same thing.

[@colebaker25]

I have no idea what I’m talking about, but If you’re issuing debt from the parent llc to the individual, wouldn’t the person suing you check bank/financial statements and question the missing loaned funds? Seems like your balance sheet would be off somewhere. Edit: watched through the end and realize this is really a smokescreen. Interesting

[@ClintCoons]

Correct. Thanks for watching.

[@mrbabyhugh]

This could work also in having multiple properties under one LLC. How I would be doing it anyway, is the WY holding company LLC will loan/issue line of credit to the real estate LLC to purchase each property. Now imagine how much that company will owe the holding company for multiple real estate, HAHAHA!! No one would want to go after any of those properties with all that lein/line of credit = DEBT, LOL.

[@ClintCoons]

Yes a separate WY LLC would be the lender.

[@elgallo6626]

I’m giving you a call...dam!!!

[@OzyOzySM]

this can lead the creditors to file (fraudulent transfer act ) or fraudulent asset structure to hide from creditors specially if you do it few months before the clime ! and all assets at once ! becarful with it !

[@ClintCoons]

This strategy is a smokescreen and not a property transfer (fraudulent transfer). The friendly lien does not defeat a creditor. If the creditor obtains a judgment the lien will be dismissed because money was never transferred.

[@OzyOzySM]

@@ClintCoons I think the best way to protect assets just like offshore account . but by paying back intrest rate of 2% a year with promissory note with 10+ business benefits also to make it strong like concrete; using third party to setup the credit line with, that why if court see real money exchange, and third party that holding the deed then by law court can't harm third party whose holding the lein and any new cridetors must stay in line with big phantom tax that they must pay even if they didn't get anything!! 😉 peace ✌ from Iraq

[@williamalford5170]

What's an average cost to get the llc going

[@ClintCoons]

$1500

[@williamalford5170]

Real Estate Asset Protection is that per llc? I want to start one in Wyoming and then add more from Ohio.

[@ClintCoons]

@@williamalford5170 Yes but we have other options that might make more sense.

[@miyasunonagao8044]

This strategy can do in my country? (Thailand)

[@ClintCoons]

I do not know

[@miyasunonagao8044]

@@ClintCoons Thank for answer.

[@jeanalexandre1105]

If you have investment properties in a LLC. You cannot represent yourself in court you need a lawyer. Also higher Insurance costs

[@ClintCoons]

That is correct.

[@ionsochirca9244]

Can the attorney reach out to the anonymous LLC and confirm how much they owe? Cause then you have two choices. You either lie and commit a crime or you say there isn't any debt. Now the attorney will just say okay we don't need to deal with you anymore and they come back at you.

[@ClintCoons]

The only time you must answer if is you are under subpoena or oath in a debtors exam. Then you must tell the truth. This is just a smoke screen strategy designed to encourage settlements or discourage a frivolous lawsuit.

[@sugarsnap375]

Tax implications?

[@ClintCoons]

ZERO

[@paulross2979]

Zero because no money is being exchanged. It's just paper.

[@yvonnetims6246]

Better diagrams please

[@trendstarrealty6345]

Conversely, can a Cell LLC (owned by a Series LCC) be the lender on a friendly lien?

[@kyledammann4284]

I need help suing myself for fraud. 😂

[@ClintCoons]

Hah

[@stacythomas9916]

Omg don't be so funny, you don't expect that from an attorney talking about stuff like this. Nonetheless my coffee went out my nose when you said you'd be pleased to defend me on both sides if I did this and wanted to sue myself for it.

[@ClintCoons]

😃

[@eddieadams4770]

Superficial games. Do they work on some people? Sure. Do they work on everyone? No. So why not just buy enough insurance and not play the games.

[@ClintCoons]

Because it is the insurance carriers that play the games by excluding many claims from the policy. For example - is toxic mold covered, tenant dog bite, contract dispute, utility lien for unpaid water bill tenant ran up and carrier refused to shut off due to covid,.... The point is many claims can fall outside of your policy and the LLCs provide the added layer of protection.

[@eddieadams4770]

@@ClintCoons Good point. You need an insurance broker that knows to get you coverage for anything and everything.

[@ClintCoons]

@@eddieadams4770 Yes sir.

[@raymondwang2438]

Will a small artificial lien filed by a lending institute be more legitimate than a private party line? Especially when it is a “friendly” lien?

[@ClintCoons]

No I think they both look the same to a third party.