Meetings with team members are less frequent than other meeting types but are no less important. I think these are some of the easiest meetings to work with, because you can have a set agenda and expect that it can be followed with little deviation. For example, you schedule a meeting with your realtor to discuss a new market niche you want to pursue. While you aren’t exactly sure what the meeting will produce as a result, you should have a pretty clear idea of what you are going to talk about and that will make the meeting go easier.

When meeting with team members, let them know in advance why you are meeting and how long you expect the meeting will last. This is referred to as the meeting before the meeting. Ultimately if you want your meetings to be successful then the appropriate parties should know what to expect. This allows them to prepare and also is respectful of their likely busy schedule. As far as meeting conduct goes, be sure you are on time and, minus a little friendly chitchat, keep things on task so nobody feels like their time is being wasted. I suggest also summarizing the meeting when it ends so each party knows the answer to ‘So where do we go from here?’ When you can do these basic things, your professionalism as a goal-oriented and organized entrepreneur will shine through and impress your team members.

Meetings With Business Partners

Some of you have formal business partners, some of you are married to your business partners, and some of you may simply be considering whether or not a partner is right for you. For many investors, partnerships can be good ways to capitalize on the strengths of the members and should result in more overall productivity. Some partnerships are simple relationships between a financier and an investor for a particular deal. Others are more detailed relationships, which impact the business on a more regular basis. Regardless, your meetings with them will have some similarities.

Chances are your association with a business partner has already been at least partially established so the whole first impression thing is less of an issue. However, if you’re in charge of getting something ready for a meeting or have progress to report on, then it is a good idea to have done what you were supposed to do. This is very logical but is also often overlooked. It is wise to make sure partners have proper accountability to each other and that each partner is comfortable with both receiving and giving opinions or criticisms as warranted.

Whatever you do, if you decide to operate with a partner make sure that you get everything in writing up front. Each partner should know at the outset of the partnership what the other person is accountable for. I’ve personally seen and been involved in business partnerships that have succeeded as well as those that have failed. Sadly, partnerships seem to end because one person is doing more than the other that in turn creates bitterness and hostility. Know your roles and do what you say you are going to do to the best of your ability. Another option you may choose to consider if you are unsure about establishing a long-term partnership is to create a partnership on a deal by deal basis. This way you are not locked in to any long term commitments to anyone. If you can’t or don’t want to be accountable to anyone then don’t go into a partnership. The good news is a partner is not at all needed to be wildly successful in this business.

As you’ve seen from my little discussion here, meetings in this type of business are critical to your success. Sometimes meetings are cut and dry, right to the point if you will. Sometimes they are speculative and involve a lot of brainstorming. Sometimes they are a mystery, giving you little advance notice of what to really expect. Regardless, your approach to meetings and ability to handle them will be a huge part of your business arsenal. Treat each and every meeting as if it was worthy of your full and undivided attention and your various clients will never be left feeling like they were a waste of your valuable time, even if the meeting doesn’t end up being as productive as you might have hoped.

The way to approach meetings is a lot like approaching a client for the first time. In an initial meeting, the first impression a client has of you will have a lot of bearing on whether they choose to do business with you or not. Similarly, a scheduled meeting is basically a continuation of that first impression a client has of you. You may have to use a little intuition or gut instinct to gather what their first impression may have been. Beyond that, you have a great opportunity with meetings to either:

• Continue a good relationship that started off on the right foot
• Right the ship if your first encounter with a client ran into some snags

When you are organized, attentive, task-oriented, and just plain personable, the general flow of most meetings will be in your favor. Clients know that you are meeting for a reason and, more often than not, they will be expecting that you will dictate the flow of meetings. Be prepared to run the show, have an agenda, and be ready to adapt as needed. When you can do these things, you will get the most out of meetings you have and your productivity will shine.

One of the things that can strike fear in the heart of the novice investor is the idea of doing paperwork. Call it lack of familiarity or just fear of fine print, but this issue can be very intimidating and it also can have a big impact on your perception with others. Your clients will expect that you have some basic understanding of the paperwork you present to them and the alternative of just running everything through an attorney can get expensive real quick so where does that leave us? I suggest a happy medium and that medium is the subject of this article.

Paperwork Overview

Let’s start with a basic overview of what it means to effectively use paperwork in a real estate transaction. Unlike other commodities, real estate can be structured and greatly leveraged when you have a strong command and understanding of the paperwork with your deals. This is also why paperwork is sometimes intimidating for most people. However intimidating it may seem to you or people you do business with, it is imperative that you strive to fully understand the paperwork you use. The good news is that having a thorough knowledge of paperwork is something that can be simplified and that can be learned over time.

As far as simplifying paperwork, my basic suggestion is to create packages of forms for each type of deal you commonly do. For example, subject to deals vs. short sales.

The hard way is to obtain a new client, scramble around feverishly to gather and print the forms you’ll need (hoping you don’t forget something), and then go meet with them. The easy way is to get the same phone call, grab a packet of pre-prepared forms off your shelf, and go. Which way seems easier to you? Which way will be less stressful? I think you see my point. Beyond that, let’s discuss this further by highlighting the three main kinds of paperwork you’ll need.

• Paperwork with sellers (purchase contracts)
• Paperwork with buyers or tenants (sales contracts, leases, etc.)
• Supporting paperwork

Purchase Contracts

First of all, remember that I don’t say the words “purchase contracts” with anyone I do business with. Instead, I say, “this is the piece of paper that says you are selling and I am buying.” This is less threatening to the other party. For some reason, the word “contract” scares people.

The types of purchase contracts you may wish to use for your deals may vary considerably and I’m not one to hang my hat on one in particular and suggest it will work well in any situation. First, I’m not in a position to rightfully do so, and second, it just wouldn’t be fair for you to be thinking this is the way to go. Every situation is different and your choice of contracts should reflect this. Some basic choices to consider include the following:

• A formal Realtor contract
• A private contract that is “full-length’
• A private contract that is intentionally short

When selecting a purchase contract, remember that beauty is in the eye of the beholder. It’s not just about what you prefer to use; it’s also a function of what the recipient will think. For example, you may have learned the business from someone who subscribes to the theory that you should use your own paperwork at all times. This is a decent theory but what happens when you want to pursue listed properties such as a bank repossessed property? Realtors will often avoid and discourage contracts they are unfamiliar with so you need to be prepared to use something that is not your own for certain situations.

I tend to have a more liberal view of contract selection and can easily adapt contracts that aren’t from my own ‘library’ by adding certain key addendums if necessary. Addendums to consider might include a right to show, right to assign, or a right to inspect the property and can include whatever you want to include. In this way, any prohibitive features of a foreign contract can be “undone” by the addendums you choose and make the contract more like one you would more normally use. Keep in mind that too many addendums and contingencies in a contract can and will very often kill a deal because it scares the other party away. Keep it simple and only add when necessary.

Some sellers are accustomed to receiving contracts that are of the full-length variety and might object to something that is unusually brief. That said, for simple transactions like cash purchase wholesale (contract assignment) deals, a brief contract is all that is really needed and you can sell the simplicity to your clients as a reason why you are easy to work with. This can add integrity in the right situation. For other more traditional deals, even the simple addition of addendums or specific terms can show that you are on the top of your game and give you a defined amount of professionalism.

In my next post, I’ll discuss contracts with buyers/tenants and supporting paperwork.

In a recent post I promised to give some additional tax information on different types of entities.  Here are a few brief descriptions of each:

Sole Proprietorships

A sole proprietorship is basically a business that is run by a person and operates under that person’s social security number. There is no separate entity formed. The advantage of a sole proprietorship is that a person who files their taxes in this way can start claiming the tax benefits of being in business, without having to file for a corporation or LLC. A sole proprietor’s business identity is usually a ‘doing business as’ (or dba) kind of arrangement and is less organized than a formal business entity.

As I mentioned before, the tax advantages of being a sole proprietor are not that different from other kinds of business structures. There are two key differences that you should be aware of, though. First, sole proprietorships open you up to personal liability for the activities of the business and put your assets at greater risk. Second, the IRS is far more likely to audit you (or at least pay extra close attention to your business tax deductions) when you are a sole proprietor than a separate business entity. For many investors who don’t yet have assets that they have acquired, a sole proprietorship is something to at least consider.

Corporations

A corporation is one of the easiest and most effective ways to give your business a more defined identity and also allow it to enjoy some of the more tangible benefits of being in business. Corporations (and LLCs too for that matter) are fairly easy to establish and also easy to maintain. Most states allow corporations to be filed online and the setup process is far easier than you might think. If you want to start a business, that’s all that is necessary to form a corporation. There’s no application process, approval needed, or minimum amount of capital to do this.

Once you form a corporation, you can then set up a bank account in the name of the corporation and start routing expenses and revenue through it. This allows you to more effectively separate your business actions from your personal affairs, which is an important distinction when it comes to taxes and the IRS. Expenses run through a corporate account are generally much easier to claim as tax deductible, even though, this is not an excuse to manage company funds improperly.

Unlike LLCs or limited partnerships, corporations are generally not the best entities in which to hold assets and many asset protection specialists would recommend a corporation for business operations and one or more alternate entities that would house the assets, in your case real estate. The bottom line is that, like other formal business entities, corporations make it easier to account for company expenses and are also less prone to extra scrutiny by the IRS. Given their relatively low expense to establish, they are worthy of serious consideration.

Limited Liability Companies (LLCs)

The limited liability company (or LLC) is a fairly new kind of business entity but has been around long enough to be ‘battle tested’ in legal settings. LLCs have some advantages other entities do not. LLCs are fundamentally partnerships so they have members, rather than officers and directors like a corporation. They can be set up to emulate the tax benefits of corporations but also can be effective entities in which to hold real estate assets. LLCs are seen as generally being much better for asset protection than corporations, even if the tax advantages between the two are probably a draw.

Operating an LLC gives you a similar level of identity and authority to that of a Corporation. Clients will note that you have a company and can even look you up in some states to verify that your company actually exists and is registered with the state. Like for corporations, don’t overdo your stated title within your company. What you do is far more influential than what your official title is within the organization. Remember, you are working on Main St., not Wall St.

Limited Partnerships

Limited partnerships are common business structures for larger projects, as they are ideal for situations where moneys need to be raised to fund a deal. Basically, a limited partnership works like this. A general partner manages the partnership, carries a small percentage of the ownership, and a high percentage of the liability. Numerous limited partners carry the majority of the ownership but have almost no liability. In this way, actions brought against the limited partnership (such as a lawsuit) end up in the hands of the general partner, who owns next to nothing, as far as the total partnership value.

Limited partnerships are great tools to raise money and protect the interests of the contributors. They aren’t necessarily of much general use to the average real estate investor who buys houses here and there. Typically, these structures are more suited for land projects or commercial real estate and may be worth exploring based on your individual needs.

I hope this look at various business entities enables you to choose the best organization of your business. Also, don’t forget that I can still provide you with what I know the most about – the how to’s of real estate investing. Contact my team using the following link to find out how!

http://www.brianevanssupport.com/

Most real estate investors don’t know how to overcome the buyer and seller objections. Of course, as a real estate investor, you’re going to have to ask personal questions. You’re going to have to ask what people owe on a property. You’re going to have to ask if people are current or behind in payments.

You’re going to have to ask potential buyers what their income is. You’re going to have to ask them how much they can afford to pay monthly and what they can put as a down payment.

The more personal you get with a lot of your questions (even though you have to know the answers to these questions) the more objections and questions you’ll raise in your clients’ mind. The key is knowing how to overcome these objections.

Now, we could quite easily spend an entire hour talking about this topic and dissecting it from all types of different angles. But we don’t have that kind of time. So, what I’m going to do is give you two pointers to take away with you today.

Pointer #1 on how to overcome buyer and seller objections is, before you pick up the phone and call your buyer or seller, make a list of potential objections that you think might come up during the conversation. And have an answer to those objections before you speak with them.

Believe it or not, this is actually a more simple process for you to do than you would think. Simply put yourself in their shoes and raise some objections about your conversation. This is called preparation. And in fact, if you do this and then have the conversation with your client, you’ll be surprised. I would wager that less than half of the objections that you thought of were actually brought up by your client. So, a lot of the fears that you have in your mind are questions and objections that most likely won’t come up with the majority of the people that you speak with.

Point #2, and this may sound simple, but you have to have confidence. When you speak to these people on the other end of the phone or meet with them in person or whatever the case may be, you have to have confidence in yourself.

Self confidence will take you farther than you ever imagined possible. Develop your confidence and you’ll be able to overcome buyer and seller objections. It might help to verbally practice answering objections that you may potentially hear from a client. Don’t be self-conscious, just give it a try. Speakers all over the world have to practice speaking before they get on the stage, most ministers practice their sermons, it’s just good diligence on your part to be prepared.

Keep in mind that most buyers and sellers will have the same questions. As you gain experience and knowledge, objections get easier to answer. Also, continue learning yourself so you are up to speed with real estate changes in your area. I’m a firm believer that you learn from others’ mistakes, that’s why I share so many of mine. Now, some things you have to learn for yourself, but if you have a good mentor you can tackle these mistakes with ease. If you want to learn more about investing and have a desire to succeed, then visit this link to fill out a help ticket so one of my team members can call you and discuss what we can do to help!

http://www.brianevanssupport.com

Demonstrating and honing your skills and professional expertise is vital to your success when working with clients and peers. It is equally as important to maintain credibility with Uncle Sam. After all, taxes are an inevitable part of running a business and, while they can be effectively reduced in many ways, they also need to be accounted for. The way in which your business is set up can have a big impact on how you are viewed, tax-wise, and thus directly and indirectly influence your professional longevity.

Basically, it works like this. When you decide you’re going to go into business as a real estate investor, there are any numbers of ways in which you can do it. You can simply leave things as they are, operating as an individual and simply enjoying some tax breaks for the properties you are able to accumulate. That said, there are some significant disadvantages of this approach, even if it is the easiest way to go.

First, you lose out on some substantial tax deductions when you operate your business individually. Expenses that are at least partially deductible for businesses are generally not deductible for you if you are not operating as an organized business. Examples include:

• Marketing expenses
• Utilities pertinent to your business operation
• Phone and Internet
• Vehicle expenses/mileage
• Supplies
• Meals or entertainment with clients

Your team accountant has the final word when it comes to deductions but these kinds of expenses are typically a) available to businesses and b) not available to individuals so consider this lack of business structure carefully, if you are thinking about it, because it can greatly impact your bank account.

Another clear disadvantage of not using a business structure relates to liability. Business entities allow properties you own as investments to be titled in a name other than your own. Many states have homestead laws that allow liability protection for one’s personal residence but these rules usually don’t apply to investment properties so you need to be careful. You are investing in assets which ideally have tangible value so that can make you an attractive target if your business operations don’t do much to protect the assets you accumulate.

Since there are some clear advantages to protecting your business assets, as well as enjoying additional tax breaks, what options do you have for organizing your business? There are several ways, and you should decide which is best for you with the help of your team accountant and/or real estate attorney, as this is their place to shine. Let the professionals do what they do best.

As I suggested, there are several options for business organization. These are:

• Sole proprietorships
• Corporations
• Limited Liability Companies (LLCs)
• Limited partnerships

I’ll briefly discuss each of these entities in my next few posts, however my best advice to you is don’t go forming any entities until you know why you should be forming them. If you have yet to do a single deal then why do you need a business entity? Go make a big fat check and then consult with someone to get your business set up properly. Although having an entity is important, it is not required to start doing deals.

Some real estate investors develop what’s called ‘the professor syndrome.’ They think that because they’ve done a deal or two deals or three deals and made a little bit of money here and there that they don’t need to learn any more. Wrong. You need to constantly be learning new things.

The market changes, real estate changes. You need to adapt to the market conditions. You need to be able to adapt to the economic changes. You need to constantly learn new things.

I strongly believe that the minute you stop learning, is the minute you stop growing and the minute you start dying. You always can learn new things, no matter where you are in your business, no matter how successful you are. You need to constantly make that a part of your life, of learning new things. Just don’t stop learning. Always do the best you can and continue to acquire new information to make yourself better, to make your business better, to minimize your costs and to grow your revenues.

Learning is a lifelong process and a business builder. It’s healthy and it will make you more money in the long run.

Another way to avoid being a victim of the professor syndrome is having a mentor. Sounds kind of plain, doesn’t it? You’d be surprised how much better you can be when you have a mentor, especially in your early days.

In my early days I had a mentor. And I still have a mentor to this day. And it’s been extremely vital to my business that I have somebody that I can go to when I have a question that’s above me, or just a situation that I need to discuss with somebody that can help me see the big picture, that can help me make a decision.

Even if it’s a decision that I already know and believe is right, sometimes it makes you feel good to have some reassurance that your mentor can agree with you. Your mentor will make you accountable. They will push you, they will make you stronger, they will help you see mistakes, they will help you overcome problems, and they will help you make more money in the long run. This mentor should be someone who has had more experience than you, been around the block a few more times and can keep you from thinking that you know it all or are that “professor”.

So, if you don’t have a mentor, find a mentor. And it will, without a doubt, make you a better real estate investor and make you a better person.

For the record, I want you to know that another word for mentor could be coach or consultant, somebody that’s going to help you achieve your goals and help you surpass your goals.

Did you know that Tiger Woods has a coach? Do you know that Michael Jordan had a coach? Do you know that Arnold Palmer had a coach? Some of the biggest and most successful people in the worlds still have coaches and mentors and consultants and people that work with them to help make them better. There is no reason why you shouldn’t have this same mentality.

If you are looking for a coach, do a little research and find one who will make you grow and learn as an investor. You don’t need a buddy, you need a teacher.

Most real estate investors spend the money from the rental property cash flow. Don’t make that mistake. Now, you might be reading this right now and thinking to yourself, “What are you talking about? Are you kidding me? That’s how I pay for my business expenses and keep my business going each month.”

Well, okay, that’s how you do it, but if something detrimental happens with one of your rental properties or if all of a sudden half of your tenants lose their job at the same time, what are you going to do? Are you going to be able to use that money to re-advertise your homes to get new people in them? Are you going to be able to pay for the problems that come up with the properties when they move out? Are you going to be able to put the money back into the properties to get them nice again?

Those are the things that you need to think about. And I would highly advise you that if you do, and hopefully you do, have a surplus with cash flow, passive income coming in from your rental properties, that you save that money for reserves for when you need it for those properties down the road.

Because if you have not needed it or used it yet, I can virtually guarantee that you will need it some time in the future.

Now, let me tell you a little story. We’ve all heard the term before, when it rains it pours, right? Well, it seems to me that I’ve experienced that somewhat recently with quite a few of my rental properties.

About 50%, within a few months, were all vacant. My tenants moved out or I had to evict them because they stopped paying or there was a job loss or whatever happened, it all seemed to happen at one time with my properties.

And to top it all off, one of my rental properties had a mold problem. So, I had to go and spend a small fortune, about $6,000 to get the mold removed from this property, to avoid any problems with the tenant and make sure I was doing my due diligence and civic duty as a good landlord.

So, if I did not have money in reserves with the positive cash flow income from my rental properties, then it would have been a very difficult time for me to have to find a way to keep those payments being made and get that mold taken out of the property and put a little bit of money back into these houses to get them fixed up, painted or whatever and back on the market.

So, if you have not experienced that yet, I hope that you don’t. But it’s very likely that you will, at some point, experience a situation similar to this. So, it’s always best if you do not spend the cash flow from your rental properties. The cash flow in your business should come from other sources. It should come from non-refundable option deposits. It should come from your quick flips, your sale and different things like that.

So, if your business is living on the cash flow from your rental properties, you want to seriously think about different income alternative sources as soon as possible.

The second thing you need to do is take action so you have a reserve for when things do go wrong. You need to have a reserve, because Murphy lives everywhere. And if something can go wrong, it will go wrong. And you need to have the cash reserves in your business to sustain your business when this happens.

So, make sure that you do have a reserve amount of money that your business can live off of if necessary, especially if detrimental things happen all at once. The difference between making it through difficult times and collapsing under pressure may just be those extra reserve funds you have so smartly saved.

Planning for financially challenging times is not the most pleasant task, but one to do so those times aren’t as stressful. You must continue to learn, plan and take action for all the good, bad and ugly business.

You may have read that title and thought what in the world is wrong with trying to improve my weaknesses and wanting to make a lot of money by building a real estate investing empire? Read on fellow investor and reflect on what I’m about to share. A big mistake that a lot of real estate investors make, and in fact a lot of entrepreneurs and just people for that matter make is they try and improve their weaknesses when instead they need to be improving their strengths.

I learned this mindset from a mentor of mine, Dr. John C. Maxwell, a very well-known leadership coach. If you focus on trying to improve your weaknesses, and if you’re really bad at something, then you are only going to go from really bad to bad. If on a scale of one to ten you’re bad and you’re a two, you’re going to go from a two to maybe a four. I mean, how is that going to help you in your business?

Now focus on the strengths side. If you’re good at something or even average at something, you’re going to go from average to good or from good to great. And again, on a scale of one to ten, if you’re a six you might be able to go from a six to an eight or nine.

So, it really does make logical sense if you think about it: If you’re good at something, focus on getting better at what you’re already good at. If you’re bad at something, stop trying to try to get better at something you’re already bad at, because you’re just going to waste time, money and energy and that’s only going to bring you down. So, focus on improving your strengths, not trying to improve your weaknesses. Identify what in your business you are really good at doing, build on that and then find someone who is good at the things you know are your weaknesses therefore, growing your business.

This leads directly into my next point, which is a lot of real estate investors try to build an empire before worrying about today’s cash flow needs. I remember when I first got into this business and how excited and passionate I felt. I was so green, I was so full of energy that I could not wait to build my empire and be like Donald Trump.

You lose sight of what’s really important on how to get there, and if you don’t take care of today’s needs and the bills that you’ve got to pay this month, then how are you going to be able to get there and create this massive empire?

So, when you run your business, the deals that you pursue need to be able to get you from month to month, quarter to quarter or year to year. And as the deals that you are doing are generating the cash flow that you need to survive on a regular basis, then you can start worrying about getting wealthy once you’ve built up some money in the bank account and you’ve got some cushion and you can start to explore and expand your comfort zone a little bit.

Don’t get wealthy before you get rich. You want to get rich before you get wealthy. You want to have money in the bank, you want to have liquid cash that you can fall back on before you worry about having this empire of properties that you have in your portfolio.

So, really you need to prioritize what’s important. I’m not telling you not to focus on the big picture of generating an empire, but I am telling you that if you want to get there, you’ve got to generate cash and worry about today’s cash flow needs rather than worry about tomorrow’s empire of wealth. Focus on your strengths in building your cash flow, then start expanding and go for the gold.

Most real estate investors don’t know how to prescreen their incoming leads. You need to be able to quickly eliminate the suspects in this business and only deal with the prospects. You only want to work with people that want to do business with you, period.

You should be able to instantly look at the numbers and decide if this is a deal for you to pursue. Whether it is a seller or a buyer. The information you want from the seller is their asking price, their loan information, repairs on a property and what the seller thinks their house is worth, and know at a quick glance if this is a property that you want to work with or not. For a buyer, you want to know three main things: what’s the most they can afford to put down, what’s the most they can afford monthly and their credit standing. Of course this is simplified, but the point is prescreen and proceed.

You need to get really good at prescreening your deals, because if you try to over analyze something and you’re struggling to even know if a new lead that comes in is a deal for you, then you need to go back to the basics. You need to understand and get very good at prescreening your incoming leads. So, that way you can get rid of all the time wasters (suspects) and only focus on the prospects.

That leads to another mistake made by most real estate investors when it comes to buyer leads. The big oops is putting tenants into a house without collecting enough of an option fee. Boy oh boy, does this mistake ring a bell for me. Let me share. I had a house that I put a lease option tenant into the property. And it was a house that I had vacant for a little bit longer than normal and was starting to get a little bit antsy. I wanted to get that thing occupied. I was just tired of writing a check every month and not having a check coming in.

Well, stupid me, I go and I put a tenant into the property with pretty much no money from them. And I got sloppy and then I had to evict them. They didn’t make the first month’s rent payment. And frankly, it’s my own fault.

So, don’t make the same mistake that I did. If you’re going to put lease option tenants into your houses, make sure that you get at least 3% to 5% of the purchase price from them. That is the guidelines that I usually follow. I made an exception to the rule and I dealt with it, but that’s life. I made the decision and then I had to suffer the consequences.

So, for your sake, if you’re going to do lease option properties and you’re going to put tenants into these properties, please get as much of a down payment, a non-refundable option fee from them that you can. Do not put tenants in properties without collecting enough money from them.

If you put them in for just a few hundred dollars, I can virtually guarantee you that you’re going to be getting that house back a lot quicker than you thought. So, take my advice on this one. It’s not worth the headache.

I wanted to share with you a mistake that can squash your real estate investing business. This is a big one. This is very important – real estate investors, beginners and seasoned investors, do not take title to properties in your own personal name. And whether you know it or not, that is a no-no. It's not good.

If you're trying to build your empire and you're buying all these properties in your own name and something does eventually happen down the road and there's a lawsuit brought up against you for one reason or another and an attorney goes down to public records and looks up all the real estate that you own and they see 20 properties that you own, all in your own name, you're in trouble. Well, he is just going to be rubbing his hands together, licking his chops and thinking, "Man, we're going to get this guy good because we know everything he owns. We know all his assets." It's all public information. Don't you think it would be a lot smarter, at the very, very least to at least put these properties in one of your corporations, an LLC, a limited partnership, something like that. But even better, if you were going to hold title on properties, it would be even better if you put these properties into a land trust, a grantor trust. It's very simple.

A land trust is something that simply holds title to property. There are two parts to a land trust. There is the warranty deed to trustee, which gets recorded, and you as the beneficiary, appoint someone as the trustee of the property. I would recommend it not be somebody with the same last name as you, it should be one of your entities, whether it's your corporation or LLC or whatever, that should be your trustee. And the second part of the land trust is the trust agreement, about a 12-page or so trust agreement. Yours might be more or less depending on whichever one you use. Mine's about 12 or 13 pages. And that trust agreement does not get recorded. That trust agreement is simply the babysitting instructions for the trustee and it also tells who the beneficial interest is of the trust. So, the trust takes title. The trust owns the property, but you or your entity owns the trust. I don't want to get too confusing here. If you need to, go back and reread that last paragraph.

But utilizing land trusts is very, very smart in your business. And if you're not sure about doing that, contact me and I can work on helping you understand it better about land trusts or any of these other things that we're talking about. And it would just be very wise to not get into the habit of taking title to properties in your own name. You do not a want people to know how many assets you have. And the empire that you're creating, you want to remain private as much as possible, because it will just help minimize potential problems down the road. So, be wise about this. Look into using a land trust or even an entity versus putting properties into your own name. And for the record, a side note, this can also go for the actual home that you live in. The home that I live in is not in my own name. I keep it in a land trust. So, every piece of real estate property that I own is in a land trust. It does not cost any more when you buy a property to put it into a land trust than it does to put it into your own name. All it depends on is what piece of paper you use to have that filed at the courthouse and in this case it's a warranty deed to trustee if you're using a land trust.