How to create Asset Protection

Real estate asset protection is what the rich real estate investors do. They don’t take the same risks, but instead, they use the law to ensure maximum advantage. It’s not sleazy, but instead, it’s using the rules that are available to ensure that you get the most advantageous situations. Here, you’ll learn how to create the best leverage in a lawsuit, and how to protect yourself.


Many people don’t realize that there is a tool that is not used, which is a contract that will favor you if a deal goes sour and litigation may happen. We don’t want that to happen because it is expensive, but instead, we form a contract that gives insane amounts of leverage to settle a lawsuit quickly. The way for you to protect yourself in the event of any lawsuit, whether you’re the one suing or you’re being sued, is an LLC. These are what will protect you, and we’ll tell you how.

First, you should make sure any remedies are in the document. This prevents you from having to use complicated legal remedies. If you’re buying the real estate, and it goes bad, do you want the property or the money. If you want to get the property, you should make sure there is a “specific performance” clause there. Otherwise, you’re left with the suit for damages and money, and you have to prove the damages.

Unless you were getting a lot on the property through the way you show this is liquidated damages, which is a clause that states that the number of damages in the case of the breach of the contract, especially if the other side backs out. For example, you could say in this that if the seller refuses to execute this sale after the buyer gets financing, then the seller is liable for the liquidated damages up to $40,000. This should be one-sided so that the buyer is the only one with rights, and you can get more leverage over the seller since they have more to lose. Many may balk at this, but you can counter with this by asking them if they have any intention in backing out of this deal after you’ve put all this money into it. This clause will ensure that they won’t, and it gives you much more confidence if they know that you’re serious. It also opens the door to negotiation about what amount of damages are agreed upon between the two of you. If litigation does happen, it will really help the attorney.

Remember that every time you feel a deal is about to go bad, be prepared for lawsuit. Even if you don’t believe anyone will sue you, an LLC is used for protection. You may not be sued either, but you may have to sue someone, and you put yourself at risk. In the US, the prevailing party will get attorney fees, and you’d be surprised that the damages could be only a dollar, but since the other side did prevail, they could get up to 30K in attorney fees, so it can bite you.

The LLC is essentially the plaintiff instead of you. Since the LLC is the plaintiff, they get the attorney fees and damages, and they only look at the LLC. The cost for a new LLC is much cheaper than paying off a judgment, and remember that if a judgment is filed against you, it does appear on the credit report, thereby harming the score, so in essence you’re in the borrowing business to leverage the dollars with the bank, and if done in a personal sense it does hurt us.

You shouldn’t ever really do anything without having an LLC. The LLC is a way to help protect your assets in business dealings. You should only sue if it’s a last resort, and you can only sue if you’ve interacted with someone, so if you want to insulate yourself from lawsuits, you have to act like a business, and by creating an LLC that has little to no assets, it creates a shell. Since the LLC is made of the communications and the contracts, that’s the only entity people will go after. So if a lawsuit does happen, the worst case scenario is a destroyed LLC, which is not as bad as you may think.

LLCs can save you, and it’s the best means to employ asset protection.

Leave a Reply

Your email address will not be published. Required fields are marked *