Asset protection for real estate investors.

By Tresp, Day & Associates · April 6, 2020

Few assets combine value and liability like rental real estate: a slip-and-fall, a tenant dispute, or an environmental issue can trigger a claim, while years of appreciation sit as equity waiting to be reached. Structure is what keeps one problem from becoming a portfolio-wide disaster.

One property, one entity

Hold each property, or a small, low-risk group, in its own LLC. If a claim arises at one property, liability is generally confined to that entity, leaving your other properties and personal assets untouched. This isolation is the core of real estate asset protection.

Add a holding company as you grow

Managing many single-property LLCs gets complex. A holding company that owns them consolidates management, adds a layer of separation between you and the operating risks, and can improve tax efficiency, a natural step as a portfolio scales.

Protect the equity itself

Entities contain operating liability, but your ownership interest is still an asset a personal creditor could pursue. Owning the structure through an asset protection trust, and choosing a state with strong charging-order protection like Wyoming, protects the equity too. Tresp, Day & Associates designs these structures for investors of every size.