Friendly Liens and Equity Stripping (WARNING!)
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- Опубліковано 29 вер 2024
- Friendly liens absolutely can be used as part of your asset protection plan but there's more to it than equity stripping and filing liens on your own properties.
Always structure your real estate properties and business assets to suit your desired outcome and needs.
I teach many different methods for protecting your assets, like friendly liens, all over the country as well as here on my UA-cam channel, but there's no such thing as one size fits all approach.
Watch this short video on how equity stripping and the use of friendly liens on real estate properties can be used correctly.
When you're ready to see if this strategy might be a good fit for your particular needs then reach out. We'll be glad to set up a FREE strategy session to see how we can best help you.
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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.
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This video was posted 8 minutes ago, which means I'm already late watching it.
Clint, have you done a video on the part @9:15 where you talk about actually putting up the money and securing a Line of Credit? Also, do you have to be licensed with the NMLS in order to do this? In the Texas Constitution, it states that "ONLY A LAWFULLY AUTHORIZED LENDER MAY MAKE LOANS DESCRIBED BY SECTION 50(a)(6), ARTICLE XVI, OF THE TEXAS CONSTITUTION"...Does a Line of Credit fall in that category? Thanks
This would not apply to you - the law is to protect the public from unscrupulous lenders.
Here’s your chance…………… actually have transferred the money or tell the truth.
What Clint! Genius Very interesting!
Thanks
What about each property title is held by a distinct revocable grantor trust, the beneficial interest is held by a distinct LLC, and another distinct LLC holds the friendly 2nd lien?
sounds great!
Love the videos keep them coming! But After watching a lot of these videos from different attorneys or attorney CPAs it looks like every sophisticated defense can be beat with a slightly more sophisticated offense. Unless using an off shore irrevocable trust (which has its own issues regarding zero ownership) your asset(s) are exposed to some degree.
Interesting. Do you have any videos you could point me to that layout how attorneys defeat this type of planning. I always like to know what the other side is planning so I can tweak the strategies to make them even more effective.
@@ClintCoons I believe it was this one
ua-cam.com/video/SlTZNqNgLQ4/v-deo.html
@@ClintCoons so far I have seen content by The Business Guy, Legalees, Vistage World Wide, and RDJ Law
@@nicholashodson7387 I am sure this could work but you must report to the IRS each year on your offshore dealings. Most people I run into fail to do this.
Clint, love the videos thank you. Question - for those who want to use this strategy and want to actually loan money to an LLC, can it be done in "chunks" perhaps with the loan structured as a line of credit that gets drawn down $25k at a time? I'd like to loan the money, but I don't have ~$400k lying around in cash to loan all at once. Could one theoretically loan $400k in $25k increments by repeatedly contributing to the lender LLC, loaning to the property LLC, and distributing that money from the property LLC? Cheers.
That is exactly how it works.
@@ClintCoons rad. thank you sir!
@@ClintCoons Would this create any taxable events by repeatedly distributing the money this way?
What happens if your LLC actually transfers cash to you for this transaction?
All the better. Now your loan is secured.
What about a cook islands trust owns a llc who holds the promisary note ?
That is definitely next level.
or your AP Trust could loan the money to buy the property and take back a note.?
Yes
Thank you for sharing!
Of course!
Not if your LLC is offshore under an offshore trust.
So then what is the RIGHT way to do equity stripping? How do HELOCs work for equity stripping?
A HELOC is the best strategy because it gives you access to cash but it does hit your credit. If the credit is not an issue first try for the HELOC before using an equity strip.
if one forms an LLC for a property, then is it still possible to put it in a Living Trust? How would the titling work?
The LLC would be owned by the living trust.
This question doesn't apply to this video particularly, but have you ever heard of a Wyoming LLC and its anonymity making it harder for investors to secure financing? Also, if i deed personal properties into the LLC doesnt that make me not anonymous anymore? For example, i bought a triplex in my own personal name to secure FHA and then decided to transfer title into LLC. Thanks in advance.
Correct. I have other videos discussing this topic. Anonymity makes it difficult to obtain financing unless you have a pre-existing relationship with your lender who is willing to loan to a LLC.
Will equity stripping with a bonafide arm's length loan (i.e. mortgage loan) prevent IRS liens?
It wont prevent an IRS lien but an IRS lien would take second position to the equity lien if the equity lien is what is referred to as choate. This means it was timely perfected before the IRS lien attached. If you or your entity is the lender with the choate lien the IRS may disregard the lien - depends on facts and circumstances. Some taxpayers have found themselves in hot water by placing fictitious liens on their real estate to avoid trump IRS liens. This is considered fraudulent because its intent was to avoid a tax obligation.
If i open a friendly HELOC, cant i always loan the money to myself only in case of an impending lawsuit?
Yes you can always loan yourself the money.
After watching a lot of these videos, it seems like every sophisticated defense can be countered with a slightly more sophisticated offense. Outside of off irrevocable trusts it looks like your assets are exposed at least to some degree
Nothing is 100%.
Great video! Question.....When you put a friendly lien on a property, is the first lender with the first lien typically notified? Just wondering if this might spook or trigger something negative with my bank that owns the first lien. Thanks again!
I have not seen it happen. Lenders typically pick up other liens via your credit report. You will not report yourself to the credit bureau so it should not be an issue. Now if your loan prohibits a second lien on the property then you should avoid this strategy.
A newbie Question how do i put a lien on the equity of my home (mortgaged)
Record a Deed of trust or similar instrument.
@@ClintCoons thank you for getting back so quickly, can i do this through the ppsr who would i go and talk to about this and is it worth it from your point of view
@@mccarthymahem9672 Depends on the equity. You should have a title company help you with the lien. You would first want to set up a promissory note that is evidence of the amount your LLC agrees to lend you.
What If you do the friendly lein strategy but with an offshore trust?
No difference.
BUT IF ALL SHOWED A LOAN LEAN FOR MORE THAN PROPERTY IS WORTH THEN OTHER CRAZY PARTY ON DEED {MY SON WOULD NOT BE ABLE TO GE A LOAN RIGHT?
Correct but you should not utilize this strategy if you do not own 100% of the property.
Umbrella insurance
Thank you for this! This just answered a question I posted on another video.
Glad it was helpful!
What is mammon?
Not sure what you are referring to?
Would a friendly lien by your Wyoming holding LLC protect that friendly lien from creditors?
It is a smoke screen unless you actually loan the money then your LLC will become a secured creditor and you will have protection. The purpose of a friendly lien is to discourage judgements and entice your creditor to settle.
Mr. Coons, I have to say this teaching requires 3d thinking. I really wish dit could be easier. My question is that if, putting assets into a Wyoming llc. The registered agent service fails the client. That is the only weak point, that I can see. Are the agents liable for mistakes they might make, of failure's to inform of a suit?@@ClintCoons
Thanks from everyone for all your replies. My question: If you do it legit and an LLC has a bona-fide loan of $10k on property worth $100k, can a creditor say "LLC take your $10k and we'll take the $90k". In other words does the LLC loan have to be as much or more than the equity of the property?
The loan is only protected up to the amount owing. Thus, if you owed 10k to your LLC then that is all you could claim.
@@ClintCoons So, the safest bet would be the LLC borrows to the full value of the asset and has a 30 year loan, with interest, payable on demand, even at the end of 30 years?
@@propertyrightsmatter8156 Yes you want to make the equity appear fully encumbered. This is a great smoke screen.
If each of these houses is owned by a Land Trust, whose name will be on the Note as the borrower? I hope it won't be the owner himself because the Promissory Note is public, right?
The borrower and the PN is not public but the mortgage is.
Is the borrower the Beneficiary or the Trustee?
you turned back to the tenant issue
and the subject was when a sue happen from outside to the person own all !
you didn't gave a solution to this but tried to show a solution to different sue case
less aggressive than the first!
I think you had valuable videos before but this will show you only want to collect views 😉
What I am teaching in the video is the danger of just relying on a friendly lien strategy to protect your real estate and not setting up LLCs. I have listened to several promoters tell investors to avoid LLCs and just follow this strategy. What is never discussed is the friendly lien is just a smoke screen and by itself, you could put your real estate at risk. My solution at the end was to place each property in an LLC then put a friendly lien on the property for added lawsuit discouragement from the inside creditors.
@@ClintCoons that makes sense.
Clint, can you deed a title if their is a lien on the home?
Yes and the lien passes to the new owner if it is not cleared.
How would this change if you own your house outright (no mortgage)? In other words, if I own my house, and am looking to protect it from creditors, would the only change be the primary lienholder becoming the LLC as opposed to a bank/mortgage lender? What are the ramifications of that?
If you place a lien on your own house (deed of trust) this will appear as an encumbrance that signals to potential creditors your house has very little equity. It is a smoke screen. Since you did not loan/borrow the money from your LLC the equity is not encumbered if a creditor takes you to judgement and proceeds with a debtor's exam.
@@ClintCoons So if I understand you, in that situation the debtors exam would reveal to them that I had simply created a smokescreen and my efforts would be wasted, correct?
@@stanleymasterson1135 Yes but keep in mind the purpose of the smokescreen is to keep you from getting to this point. It broadcasts to the plaintiff "take the insurance and settle because there are not assets available".
Wouldn’t a land trust be a vital tool for this asset protection?
The land trust is a great tool but it is just a tool. I use land trusts when they are needed. For example, if I was purchasing property for cash I would not use a land trust (in most situations) and just take title in an LLC. The LLC, if set up properly, has anonymity so there would not be a need for the additional entity.
@@ClintCoons thanks for prompt reply. Makes complete sense.
You bet.
How protected are you if you equity strip and put the properties in a trust?
It is a smoke screen unless you actually borrowed the money from a lender.
@@ClintCoons Which strategy is the strongest?
@@rhiannonfountain6713 Placing real estate in an LLC and if possible obtaining a real line of credit from a bank.
Can you do a friendly lien on your personal home.
yes
@@ClintCoons can you put the LLC to your wife's name or someone who is not on the loan.
@@kidokid8393 Yes but I would only do it with someone I trust.
Great video! I assume this strategy might work on a personal residence as well, correct?
Correct
I would not even give the person who suggested this type of asset protection plan my time of day or night : | ........ Talk about a massive headache - This plan just sings problems - not my way of spending my time : | ........ Question : will you shed some light / truth about Cook Island Trusts and as much as you know about all there is to know about these types of asset protection practices and plans ??? : | .......... Thank you very much : ) ........ Peace on Earth : ) .........
I do not have any information to share on Cook Island Trusts. My work is strictly limited to domestic entities.