Over the course of your life, you will (hopefully) amass what we call “assets” (aka stuff worth money). Some of those assets might be growth or income-producing assets, such as stocks or real estate.
Here is the basic scenario you want to avoid. You own all your rental property in your personal name, along with your other assets like your house, your stocks, your cash, etc.
You can get sued for anything it seems, and lawsuits are a primary way we can lose our assets. Here are two more areas in which you may be susceptible to lawsuits.
Largely this would include something “bad” happening at your residence, like your dog mauling the neighbor's kid. Or while driving your car, you hit and maim someone.
What else do I need to know about real estate LLCs and asset protection?
Good question. While my nutshell statement is true, there are a few more things you might want to consider when deciding how to develop your asset protection plan.
When deciding if this asset protection strategy is right for you.
What states are the properties in, and what state do you live in? If they are not the same, your entity costs could go up even more because you may need to register the entity in the state of the property, as well as in your own state, and pay double tax.