Most of us think about asset protection, liability protection, and tax planning.
And those are important things… eventually.
If you’re just getting started in real estate investment, those are the last things you need to worry about.
People tell me, “Well, David, I can’t make that first purchase because I don’t know how set it up with liability protection.”
And here we have another manifestation of analysis paralysis.
I totally relate to this. I’m analytical, too. But we can’t win in life doing everything that way.
Here’s the thing. You can get liability protection all day long with very inexpensive liability insurance.
The same goes for tax planning. That can all be done with or without an entity.
Most of the entities we use are for further down the road.
If you don’t understand that, you’ll become an “I have to have” person.
“I have to have everything all set up.” “I have to have all these entities.”
“I have to have my perfect road map for asset protection, liability protection, estate planning, and taxation.”
“I have to have those things all together before I can actually make my first move.”
Don’t fall into that trap. Start simple. Buy the property, get insurance, and call it good.
Do four or five of those, then we can talk about entity selection.
Remember, you can always move the title of your properties into entities after the fact.
People also ask me about using trusts. I’ve been to trust courses for decades, and there’s way too much to get into here, but one important note:
Realize that a trust is not an entity. It’s a contract, but it also has a purpose in titling real estate assets.
Regardless, the moral of the story is, let’s not get ourselves wrapped around our axle.
Let’s get the property, let’s get the investment protocol working first, then let’s come back around talk about setting up entities, structures, and maybe trusts.
Don’t get caught up in the idea that everything needs to be perfect.
If you wait to get everything perfect, guess what…
It never will be, and you won’t get anything done.