Unlock the full potential of your real estate investments with the wisdom of Damola Huluomo, a savvy deal sourcer from Central Indiana, who rejoins us to spotlight the game-changing strategies for business structuring. Get ready to fortify your assets by discovering how the right legal entities, like LLCs, can act as your financial guardians in a world ripe with litigation. Our discussion is rich with insights, revealing the layers of protection and professionalism that proper structuring provides to investors, regardless of where you stand on the real estate ladder.
As we navigate the perks of crafting your real estate empire with precision, Damola breaks down the compelling advantages of business entities beyond just liability shields. Imagine a world where taxes work in your favor, property transfers glide effortlessly, and your business exudes a polished charm. These are not distant dreams but the fruits of meticulous business structuring—a roadmap to preserving your wealth and ensuring a legacy that withstands the test of time.
For those feeling the pinch of limited capital, fear not! We delve into the entrepreneurial spirit of real estate, sharing creative tactics like wholesaling and 'driving for dollars.' Learn how you can transform a keen eye for distressed properties into lucrative deals, and unravel the once-intimidating process of transferring mortgaged properties into trusts. With Damola's guidance, the message is clear: a thin wallet is no barrier to a rich future in real estate investing.
Unlock the full potential of your real estate investments with the wisdom of Damola Huluomo, a savvy deal sourcer from Central Indiana, who rejoins us to spotlight the game-changing strategies for business structuring. Get ready to fortify your assets by discovering how the right legal entities, like LLCs, can act as your financial guardians in a world ripe with litigation. Our discussion is rich with insights, revealing the layers of protection and professionalism that proper structuring provides to investors, regardless of where you stand on the real estate ladder.
As we navigate the perks of crafting your real estate empire with precision, Damola breaks down the compelling advantages of business entities beyond just liability shields. Imagine a world where taxes work in your favor, property transfers glide effortlessly, and your business exudes a polished charm. These are not distant dreams but the fruits of meticulous business structuring—a roadmap to preserving your wealth and ensuring a legacy that withstands the test of time.
For those feeling the pinch of limited capital, fear not! We delve into the entrepreneurial spirit of real estate, sharing creative tactics like wholesaling and 'driving for dollars.' Learn how you can transform a keen eye for distressed properties into lucrative deals, and unravel the once-intimidating process of transferring mortgaged properties into trusts. With Damola's guidance, the message is clear: a thin wallet is no barrier to a rich future in real estate investing.
Welcome to Do the Talk podcast. This is your Real Estate Podcast that teaches regular people like you how to invest in real estate. If you would like to learn and grow in real estate investment, you have come to the right place. We are committed to make real estate investing seamless as much as possible. I am your host, ibrahim Ojeride, and my co-host is Ahmed Lawao. Ahmed, how are you doing today?
Speaker 2:I am fantastic. Just the code is beating me down. I have been slinging all day. Our audience will be able to understand this, so bear with me. The throat is kind of dry right now, but you know what? It's cold outside. But we are going to be bringing eats in this episode because we have another person joining us. This is a very big fan of this podcast and he is very, very non-edible. We are very true to be able to bring him back. We have brought him once before now and on that day we promised to bring him back because he dropped a lot of fire that day. And we are bringing him back today to make sure that you guys have another blast and another good episode. But keep in mind, this is not a get-rich-quick scheme. I want you to understand that everything we preach on here, you will have to put in the work, actually get the results. So, without a further delay, I would like to bring on stage Mr Damola Huluomo. How's it going, brother?
Speaker 3:How are?
Speaker 1:you doing, guys, we are doing well. We are happy to see you today. Like Amin said, you are very knowledgeable and we always feel that good energy whenever it comes to this podcast and I'm sure our audience. They are eager to hear from you today. Today we are looking at a topic and we are very confident that you can help us to shed more light into this In fact, our audience, they will benefit from this enormously and we are happy that you are here today. So we want to look at a topic which is business strategy in real estate. Of course, it's a wide, broad topic, but we would like you to dive into it and let us know how people can benefit from being a strategic business person. How can you really protect yourself? How can you be a proactive investor towards aggressive lawyers and just angry, or tenant or people that are just looking for your downfall? You know what I mean. So we would like to hear from you, sir. How can you? You can go ahead.
Speaker 3:Thank you again for having me. I'm a big fan of the podcast, so if I'm not on the screen, I'm in the chat Just watching, you know. So I'm happy to be back. In fact, I'm excited about what we want to talk about. For anyone that does not know me, my name is Damola. I help investors source real estate deals in central Indiana, so if anybody is looking for investment properties most likely off market you can reach out to me or reach out to our mayor, the brand. They can connect you with me any day, any time and hopefully we can help.
Speaker 3:So what we want to talk about today is business structure right, especially around real estate. I'm kind of familiar with this because, as somebody that sells deals to investors, I need to know how to find them Right. I try to go deep into finding this investor so that I can put my deals in front of them and hopefully somebody can buy it. So I think I have a little bit of idea of what we're talking about and before we move ahead, I just want to say it's a public service announcement. None of us on this screen is an attorney. None of us is an attorney. We are only giving you opinion on what we have done personally or what we've seen people in the business they do. So, whatever you hear today, you need to still try to contact an attorney or a legal practitioner that can also guide you in the right direction, right? So it looks like we need to just keep it rolling.
Speaker 3:There are just a few things that I want to mention today. When it comes to like business structure, right, especially as an investor, you want to save yourself from a lot of things. Maybe, because this is America, you can get sued for as little as anything that you can imagine, even if you can get sued for what you do not imagine, right? So we need to try our best to protect ourselves, and not only ourselves. We need to protect our investments as well. We don't want to spend all these years gathering all these properties into your portfolio and one day you just lose half of it, or you lose it all due to something very negligent that you could have taken care of a long time ago. So those are the things that we want to address today and, like I said, we are not nobody's an attorney here. We just want to share what we, what we know and what we think can help you Before we go into it. I don't know if any of you guys have anything to say.
Speaker 2:Absolutely. Thank you for the introduction. Even though we know you, it's good that you you reintroduce yourself to our audience. One thing that we want us to start with is when we're seeing business structure, what does that even mean? Why do you need it in real, less fit?
Speaker 3:So business structure basically means how you set up your your. There's a lot, there's a lot of parts in setting up a business, although the major purpose of setting up a business is to make money. But at the same time, you want to lay the right foundation for you to keep the most money that you can in that business, and for you to be able to do that, you need to start operating with business entities. Business entities like a limited liability partnership. We have limited liability corporations. There's a lot of kind of corporations that you can set up, but the most common ones are just LLCs that people set up to protect yourselves and not just to protect yourself. I have a few things that I want to mention and then we can go into the proper way to structure your realistic business. I want us to focus on the real estate, because that's why most of our your viewers are here. So I'm going to talk about just four, which is just a four thing that a lot of benefits to structuring your business the right way. Right, most of us started as sole proprietors. We just do everything in our name. We don't have any entities that we do business with, but along the line, we need to grow and develop and become professional. Basically and you appear professional when you have a business name, you have a brand, you set up a business account, you can get access to funding. Yeah, so I don't want to jump the gun.
Speaker 3:So first thing I want to talk about is limited liability, which is assets protection. When you have a property and it's in your name, it's public records, every de Canary, anywhere they can, they know, they can look it up and see oh, this is the guy that owns this property. I mean, if it's a property that you leave in, I don't think there's any issues with that, because I don't believe any complications can come from that. But once you start having investment properties, you want to protect yourself. You want to protect yourself from tenants, you want to protect yourself from H O A or you want to protect yourself from a lot of things that can happen out of the blue. So one of the things that having a business structure can help you with is assets protection. It helps you to.
Speaker 3:Asset protection helps you to separate your personal life from your business life. It separates your personal wealth from your business wealth. So if anything happens to, let's say, for example, you have a rental property and a tenant sleeps and fall, I can tell you the next day that tenant is going to have attorneys calling them out of anywhere that I think you may have a case against your landlord. So you and this lawyer, these attorneys, they will do everything to get you. They will do everything to get you because the higher, the more money they can get out of you, the more commission they get out of that pay. So they will do everything in their way to make sure that you pay right.
Speaker 3:But there's something that is called corporate veil. It's just like when you're about to get married, the wives comes out with a face covered. That is what they call it. So once you, when everything is done before you are able to see who is behind that that veil, so you want to have a corporate veil that protects you, that separates your own personal life from the business. So even if a tenant sleeps and fall, they can only take what belongs to the business. They cannot take what belongs to you personally. So that's one of the major things with major ways that having a proper business structure can protect you and you can imagine it could be as little as anything that anybody can sue you for in America, and when they come at you, they want to get everything, everything that they can. So first thing that I mentioned is limiting your liability by protecting your assets, separating yourself from your business.
Speaker 3:The second thing very beneficial to having a proper business structure is tax flexibility and tax benefits. If you operate as a sole proprietor, you may not get some benefits that a business will get. As a business, you can write up or write off all your expenses, so everything, and you can just write about as much as the IRS codes let you to write on. I'm not a CPA or a tax attorney, but at the same time, when you have a business, there's something that's called pass-through taxation, which means that you are avoiding being taxed in two different forms. You get your business tax and then you get your personal tax. But if you set up your LLC, your business structure, very well, you do the pass-through tax. You get taxed with the pass-through LLC. You don't get taxed two times. You get taxed on what comes out as profit out of the business After you deduct all your business expense, and then what you take home is what you get taxed on. You don't get taxed on the business and then get taxed personally because you have your business structure solid and good to go. We've talked about asset protection as far as liabilities, and then second thing is tax flexibility. You can save more money filing as a business because you are able to deduct. I think the maximum deduction you have as an individual, depending on your tax brackets, is like $12,500. No matter what you have, your maximum deduction is like $25,000. But as a business, you can deduct as much as you spent before your taxable income.
Speaker 3:I have a few people that leave off of their business. The clothes they wear every day is branded with their business. They get to write that off because it's an advert for their business, even though they wear it on a day-to-day. But now they don't technically pay for what they wear just because it's branded with their company name or company logo and they can get to write it off on their taxes. So, even as a leader, as what you wear, what you spend, your pen, your paper, I went to a meetup and I got this flag. You can see it's branded with the company right? I'm sure this guy wrote this off on their taxes. So it kind of saves them money as far as expenses as well.
Speaker 3:The thought that I want to mention is easy transferring of properties. Let's say you have properties when you pass away and you want to leave properties to your kids. There's something that's called probate and sometimes probate costs money. You need an attorney to get it done for you. It could take I think in Indiana it's about three to six months, depending on how soon you can get your court dates. So you want to cut that time short so that everybody that you leave the properties for behind they don't have issues after you leave Right. So in those cases there's something called a trust right which allows you to transfer your properties to your heirs without having to go through probate. And some people will say yes, what if I have a will and I will the property to my children? You know, I put it in my will. That goes there.
Speaker 3:Even if you have a will, you still need to go through probate. The only time you do not have to go through probate in Indiana is when one the property value of the property is less than $50,000. And the value of the estate itself, everything that you own that you want to transfer to your kids, is what is less than $100,000. So including the house, including the cars, including the money in the bank. If everything is less than $100,000, they let you go scot free without going through probate, and then the property itself has to be value less than $50,000. Right, in that case all you need to do is file a small estate, and even that it can take. You know, if you want to go to an attorney can take like 30 to 60 days or something like that. Right, so, but if you have a trust, you don't need to go through probate. So that's another benefit of you know having a proper business structure for your real estate.
Speaker 3:And the last one I want to mention because of time, there are a lot of benefits that come to it.
Speaker 3:You know, having a good business structure is a professional image. Right, when you set up a business, you have an LLC. You know is recorded at the Secretary of State. You know, people can look, look up the business. They see you are registered with the state and it gives you a form of credibility, right, especially when you're dealing with tenants, rentals and stuff. You don't want the tenants to know that this is directly my landlord, right, you just want them to say, okay, you represent the business and you just you're here to take care of things. So you want a professional image, you want to show your level of professionalism and credibility that you know having a proper business structure can get you. So those are like four core things that I think are important. But there's a lot of things that a lot of more benefits that comes from, you know, having a business, having a business, having a business structure. So those are four things I think that are important right now.
Speaker 1:Thank you for all this, all the knowledge that you have dropped down. Now I'm sure our audience would like to know a little bit deeper. You know, and I'll start by asking you yeah, everything you've explained to us now it sounds like oh, I have to call a lawyer. I mean lawyer will tell me I need to meet up in the next two weeks. They'll charge me $3,000 to meet them. After that, they will tell me they will go to court. When they go to court wherever the judge says they will determine if they charge me another $7,000 or after the $7,000, they'll put in the application. After they put in the application, they will take another three to four months. They will let me know or maybe, when they let me know, I might have to pay some consultation fee again to do all that.
Speaker 1:So my point here is that we would like you to give us a little more. I mean, you've already put in the disclaimer none of us is a lawyer here and we are not acting like a lawyer. But can you simplify a little bit? If, is it expensive to do all this? Or because it sounds like it's more of like a you know something that involves the legal team where you have to do this and do that, and it sounds so huge in the years. If you don't know how it, you know it went on and now it goes. Can you educate us a little more? Is it something that will make us break the bank or is it something easy to do? You know? Please.
Speaker 3:Well, I mean, setting up an LLC is not expensive, right, but at the same time, quality service. For quality service you need to pay good. You know, very quality service, you need to pay good you can. You can set up an LLC by yourself. State of Indiana is only cost you $99 to set up, to set up your LLC. But if your LLC is going to do business on Amazon, right, just sell some stuff, you can set it up yourself, right.
Speaker 3:But if you want LLC that does realistic business, you don't want to do it yourself, correct, believe you me, you do not want to do it yourself. You can either get the registered agent that you pay like maybe $120 a year that's some cheap ones for like $45 a year to set up that LLC for you, right? So, and they set it up in a way and you want to let them know, listen, I want to set it up in a way whereby I'm not on the paperwork. I don't want to appear as the owner of this LLC on the paper. So it comes with two charges They'll charge you for the price of the LLC itself with the state and then they will charge you for their own filing fee for doing the paperwork, right. So I don't think I do for like less than $500 you can get that done.
Speaker 1:Okay, okay, that's literally that's what I'm asking for, like, because the way you wrap everything up, the benefit, the value, it looks so huge, like, oh, I'm about to pay seven grand, or you know what I mean, and with lawyer fees and everything. So that's what I want our audience to know that even though the benefit is enormous, it's huge, the cost is not that big. That's what I want our audience to kind of understand.
Speaker 3:And one thing I would like to address is there are a lot of people that are saying, yeah, I don't care, you know I can set it up myself and just pay $99 and do that. My question to them and I know I've made this question quite a few times is do you do your all changes yourself? No, you don't fix your own teeth yourself. Right, there are a lot of things. You don't fix your cars yourself. You don't, you know, except that's what you do. So it's better to have, like a professional, you know, help you set up, help you set up your LLC. Shameless plug. I don't have anything to do with this company, but I use a company called prime corporate services. They they are very vast at setting up LLCs. They will tell you the best way to set it up and then they will guide you on how to do it. And you don't have to use them. You can use a local, the very local registered agent, to set up the business as well. But I just like prime corporate services because they're very, very knowledgeable about real estate itself. Not every Registered agent that sets up LLCs know exactly how to set up an LLC that is going to run a real estate business and then and these people also help you to come up with operation agreements that you need to operate the LLCs. So is is always what's the money to? To spend a few hundred dollars to hire a professional to To get get it done. There's an attorney here in India that's called Jeff Jinx I don't know if any of you know it does set up LLCs as well and and they're very good and they are knowledgeable in the business as well. So that's that's what I would say. As far as the pricing of setting up an LLC, and Wherever you think you start, there's always an higher level. If you think you're somewhere you're Maximumly protected, is this higher level?
Speaker 3:The fifth thing I wanted to talk about is benefits of setting up an LLC. Is funding Business funding. Sometimes that if you go to the bank and you need like business credit to help your business, no matter who you are, you cannot get enough funding as much as an LLC. If the bank is ready to fund you ten thousand dollars, I can bet that they will fund your LLC 50,000 dollars. So that's one of the benefits of having a well structured or maybe just having an LLC is Getting access to more funds than that you would regularly have to help your business to add that in there.
Speaker 3:Back to Setting up the LLC, anonymity is very, very important, like when you don't want somebody to look up your LLC and then they find your tenants can look you up and Maybe they may plan something against you. Maybe you increase their rent and they don't want it and they can just do something malicious and then Everybody knows that this is the guy that owns this property. You don't want to do that, yeah, so the best way that I know currently to set up your LLC is there are four states. That protects the owners of that LLC. They don't List the owners of the LLC on public records. Every order for the six states they require somebody to be listed on that LLC filing when you're filing your LLC. These four states Delaware, new Mexico, nevada, and I think the most common one you hear about is Wyoming, because they do not also have state tax. So when you set your LLC up out of there, you want to set it up in those four states as an olding company.
Speaker 3:The proper structure that I tell people to do is you want to set up a trust at the top of the structure and then this trust is going to have a holding company. Right on that. The holding company, or what the holding company does, is owns order LLC's. That's their main purpose. That's the mother LLC that gives birth to Every other small LLC's that you have, because sometimes you don't want a lot of properties in one LLC, so you also want to have maybe two or three properties per LLC's, but that LLC has to be owned by your holding company so that holding company serves as just an entity that owns Order entities.
Speaker 3:So when you start from a trust, you don't have to have a trust. The trust is not necessary when you're starting out, but you need it for transferring, when you want to transfer the Real estate or when you need more tax benefits. I don't, I do not have an idea more about going to trust, but I know having a trust is important. And then you want that trust to have a holding company and that holding companies. What is going to have order LLC? And I can break it down this way when, let's say, you have a Do the talk LLC or do the talk audience as the holding company LLC, right? So do the talk LLC, which is the holding company, or do the talk audience LLC. We now have a property management company. We now have other LLC's that holds property, so everybody reports to the Holding holding company and here is why when you set up the holding company, you do not appear as the owner. You used A registered agent to set it up.
Speaker 3:Now, when you're opening your local LLC because you need that holding company to come out of those four states one of any of those four state Nevada, wyoming, new Mexico and Delaware you just need one state. You can just use Wyoming for an example. So you get that one. And then when you come to Indiana, because you need an Indiana LLC to operating Indiana, the owner of your Indiana LLC is going to be that LLC in Wyoming, right, and because that Wyoming LLC doesn't have a name of somebody on it, it means that there's no name. No name will appear on your Indiana LLC as well, so you remain anonymous.
Speaker 3:Nobody can find you. You know me personally. There are some buyers that I've been looking for, but because they set up their LLC very well, I've not been able to find them. So, which means they did good. Even I'm trying to sell them a property. I'm not even trying to file a lawsuit against them or do something else, right, I'm trying to sell them a property. But they have their LLC properly structured, whereby you cannot find them except you kind of know them Personally or you know somebody that knows them Right. So that's what the holding company does. Holding company holds other LLCs. That now operates business right.
Speaker 3:And one of the things that is even important is, even when you have the holding company, you need an operating company as your first LLC, which means that is that LLC that is going to get the tenant, that LLC is going to get the tenants for one of your properties. So all your operations will come out of one LLC they that operation LLC. That operating LLC Is going to operate your listings, is going to hire People, is going to do everything right. But your other LLCs owed to actual properties, which means that if you have a house and you have refrigerator in it or your furniture's, you can let your operating LLC own all those things, so that your LLC, where the property is, only owns the building itself. So every other thing is owned by your operating LLC.
Speaker 3:Your operating LLC I as managers, I as cleaners right, they run the business.
Speaker 3:They own all the. I would have put it they own all the appliances, right. So even if somebody comes for the LLC that holds the property, they would not be able to take the appliances because the LLC that owns the property is not the one that owns the appliances in the building. Right, this is very important for people who have, like restaurants, you know, event centers that have heavy equipment. Right, you want to separate those equipment from the business that runs them so that they don't take everything with the property. So somebody does not say, oh, you have this inside, the property is going to go with property, so I'm sorry. Another LLC supplied us all those things that you see, so it doesn't even belong to our LLC. They need to go back to where, to where they come from, right, so that even gives you more level of credibility, professionalism, and then you save yourself from from all those any, any way, anybody wants to come, come for you. So, and then you can have multiple LLC that hold the old properties and stuff like that.
Speaker 2:Thank you so much. It's been. You have a question, I'm glad.
Speaker 1:Yeah, I'm so sorry. So my question is what about if somebody already established an LLC, the regular LLC? Is it now too late to go through all those steps of like getting a professional to see how they can help you put it do some asset protection and all that? Is it too late? Or or does it only apply to people that, as not people that have not registered for any LLC?
Speaker 3:So it's very good when you start with the proper business structure, but when you already started, because real estate is about taking action. Some people waste time setting up LLC and don't take action in actually acquiring the property. So kudos to anybody who have acquired properties without even thinking about the LLC, because they took action, they took action and they will benefit from from that action. But it can be fixed. You just you just need to consult the right company that can help you out. Some people will tell you you can set up the new LLC and just quickly did the. I just quickly did it to the new LLC. But I think there's a lot of technicalities that goes with that that I do not really have an idea of. But if you consult somebody that they know what they're doing, they can definitely help you transfer those properties into your new LLC Without any, without any traces.
Speaker 2:Absolutely. Thank you so much. It's been a very great information since and we do really appreciate that. So, from what I understand is, having a business structure as early as to is key, and that is because that's increase your professional capability to source for fund that protects you as a owner and what other thing that's that give you tax benefits. Those, those are the key components that have hold in my hand and if, if not for any other reason, these are more than enough reasons to end. More about business structure and even if you have done it before, like you said, yes, level to this game, so keep pushing on it. Another part of business structure that I like to dive into and put more clarity is people mixing LLC and trust. Can you quickly give us, like the two different that, what make these two different and what each of them serves?
Speaker 3:So a trust is because, like I said, right, we're not, we're not professionals in that realm, right, we only buy houses, right. But I just believe that a trust gives you a size from an anonymity. You can get a lot of tax write off with a trust. You can get to transfer your properties to your ears without going through, probably right. And even when you have an LLC you can. Definitely you can also transfer your properties when you have a regular LLC, because you can just sell that LLC to the person that wants to buy that property and because the LLC owns the house, they get whatever the LLC owns. So at the same time, you know you still transfer the property, but you know you just sold the LLC, the LLC itself.
Speaker 3:But a trust is different from an LLC when, when you're dealing with trust is when you're you're starting to have kids. You know you want to build life insurance and you want that life insurance to be attached to the trust so that all your ears can benefit properly from that trust. And in that trust you have something that's called infinite banking, because a trust can stand at its own bank where you can get funding. You can pull money out of it. But we will not get deep into that just because we do not. We do not operate in that, in that kind of business, so, but typically a trust lets you do more than a regular LLC.
Speaker 3:There's more benefits of having a trust and a trust can also own multiple LLCs, like we described right. The trust can own your own company and your own company can own your LLCs. You know your trust can also buy properties. Your trust can. Your trust is a business entity on its own Right. It can do whatever any LLCs can do, but the trust just takes it to way higher level way more protection, way more access to funds, more benefits than just a regular. So if you have more deeper questions about trust, you need to call real estate attorney to give you more answers to that.
Speaker 2:I think our next episode will be on who do you need on your team? I'm going to make sure that's what we do next, because we need to also explain that being in real estate means you need some people on your side. Being in real estate means you need a good wholesaler, like D. Being in real estate means you need a good real estate builder that understands both investment and what your residential area. Part of this is doing which is what Brian here is doing is for being in real estate means you need a good property manager. Being in real estate means you need a very good contractor, so I think that would be a very good company.
Speaker 3:We need a good title company. You need a good insurance agent. Insurance insurance insurance is very, very important, so you need a good insurance agent on your team, or your team as well.
Speaker 2:So, yeah, that is very crucial. So, if you want to learn more, please reach out to your attorney, and if you need any tax advice regarding LLC, please reach out to your CPA. So, ibrahim, do you have any additional or any questions you want to?
Speaker 1:I'm trying to think what would be the. What would be my question now to the, because he had dropped a lot of valuable information and now I'm processing all of them and I'm trying to see you know. If there's any question that might be very crucial to setting up this asset protection, and I think one of them would be if, excuse me, we are in Indiana and we know that you know Indiana, we know that it's good to have this protection and all that At the same time. D mentioned it. I don't want people to feel like that's all you have to focus on or that will be something that will probably beat you from taking action. I want you to know that people are out there. They might sue you for anything, but the majority of the people out there, they are not just on thing for suing people.
Speaker 1:I want you to take action first. If you have the opportunity, you can set up your asset protection and go ahead and take a move, but do not let that hold you back. Don't feel like you have to do all this trust LLC and everything before you get into your business. You can go ahead and do your business and while you are doing that, and making query about how to protect the business. If you have the luxury to protect your business first, go ahead. We recommend that. However, it is more important to take action first than even worry about the protection. That's what I just want to add to that. That's what I have to say.
Speaker 2:That is a million dollar.
Speaker 1:I don't really think I have a question.
Speaker 2:I just want to add to that that is a million dollar advice, because a lot of people are just looking for a way out. They don't want to do anything. They are just looking for a way out. But the most important thing is action, action, action. To be successful, it's not something that you can sit inside a planning room and spend 10 years designing what you're going to do. You have to actually go at what you're going to do even though you have no clue. But keep your open mind and you will learn. You're going to learn is not just a snack. It is actually the facts. As long as you keep an open mind, you are going to learn. You are going to learn and you are going to make a lot of mistakes and you're going to learn from it and move forward. That is a key one. Thank you, brian, for bringing that up. For me, it is very, very crucial that we are talking about this, because asset protection goes good real estate business structure and goes even way beyond, just like Dee just explained to us, go way out of asset protection alone. There's a whole lot of other benefits that comes with it. People need to know that. That is there as well. If you did the right way, those things are options as well. I think we hit everything and we don't have any questions so far. I think we hit everything that has to do with business structuring.
Speaker 2:One quick thing that I want to also let us dive a little into before our time runs up here is a lot of people are saying now they are aware of duty thought podcast, they are listening to us. They are like okay, I just learned about this. I'm so excited, I want to start, but I don't have money. If I get my past, how much do I need to save up? Things like that. Those questions are coming up Each time. I always tell the people that reach out to me you don't need a whole lot of money. There are some other stuff that you can do in real estate that you don't need a whole lot of money to get into and they pay ensembly. One of them is under O-Sailing. That is where we have driving for dollars and stuff like that. Do you want to brush up a little bit what the process is like? How much do you actually need, and stuff like that?
Speaker 3:To start O-Sailing. I think the very basic is starting to drive for dollars. I think until they tell you you are always driving for dollars, you do not just pay attention, because every time you drive around, I'm sure you drive around. If you drive for 15 miles, I think you come across minimum 5 to 10 distress properties. The aim of driving for dollars is to go out and identify properties that have physical distress. There's a tap on the roof or the shingles falling off, the sidings are falling off, there's trash in the yard, overgrown grass a lot of things that can let you know that, okay, this property is in some form of distress. If somebody is driving around and you don't have money to go and buy a list, you can drive around and take these addresses down and then you can start to call them. Driving for dollars is not what is going to get you to deal. You can drive for dollars and get 1500 properties. If you don't try to contact the owners of those properties, it's almost as a waste. So it's very important that, even when you drive for dollars, you need to take the next step by trying to contact these property owners. And in case somebody says, yeah, I don't have a car. I don't have a bicycle, it's snowing outside, I cannot drive. There's something called code violation in your city Because when people leave their properties trashed out, the city will charge them a fee if they don't take care of it. So the city pays people. There are people on the city's tax money that they are paid to drive around to identify these properties, just like we would go out and drive for dollars as well. So if you don't have money, you don't have a car. You can call the city and ask them. How can you get the code violation list? In Indiana it's called the neighborhood services. That's where you can go to see properties that are on the code violation list. You get that list and you skip through them and you start calling. So if somebody does not have money or gas to go driving for dollars, you can spend one day ten dollars.
Speaker 3:Take the bus. Take the bus If you have a bicycle and it's summer. If you want to do some exercise, go with your bicycle. Go with your skateboard, go with whatever you can. You can even just make a call. Call the city. My account enabled services. How can I get this list? When I wanted to get that list I went to the office and they gave me the paperwork on how to get the list. So if that's the only day you have to spend money, it will cost you less than $10. To get a bus from anywhere in the city to go downtown, it will cost you less than $10, right, so you can get that list as well if you do not have any form of transportation.
Speaker 2:You know, I always tell, I always like it when there is, when there is a charges to get a list, because what that tells me is little people will be having that list. When it is free, everybody will want it, but when there is a charges, some people are very stingy that they will not even pay $20 to get it Exactly. Don't let us debate. I want the Ibrahim. Or do you guys want to take the question, or I can take it.
Speaker 3:It says I have a mortgage in my name. I want to transfer the property to my trust. If I do that, what is the probability of the mortgage company calling the loan to you? Hmm, this is a very, very, very, very technical question and I think I made as many more insights.
Speaker 2:So there are so many things that can happen for due on sale to be called. So what you are actually asking is what is the probability of my mortgage company calling a due on sale clause on me? So due on sale is when you sell a house that still has a mortgage on it that the bank needs to be paid immediately. The house is being transferred from your name to anything else, even LLC. Even though you own that LLC, due on sale can be called on me. Now you are the one that guarantee the loan, not the LLC. So there is a clause in the mortgage document that you sign that says you cannot transfer that house to someone or anything else except for you. However, doing it is not something that doesn't happen. It happens every day. In fact, today, people do subject to transaction today, so it happens all the time. There are few things that, if you do them wrongly this is where subject to is very technical. I tell people, subject to is technical because if you do them wrongly, if you make those wrong moves, that will trigger due on sale. One of it is insurance on that house. I believe you own that trust, so moving your house inside that trust alone will not trigger due on sale. Moving that your house inside the trust alone will not trigger due on sale. So due on sale will not be triggered just by you moving that house inside your trust. So there is a potential that it could happen and that is why I mentioned the number one thing that triggers due on sale is insurance. If you mess the insurance up, then that will trigger due on sale. Number two thing is you want to look at how big is the bank. Is he a bank that is a local bank or is he we are talking about West Fargo Chase a bank of America? If we are talking about bank of those capacity, they don't care as long as you don't miss your payments. The only time they check your record after the day of you closing on that house is when you miss your payments. If you are doing something in your company, missing your payment is just like you calling the city to come and look at what you are doing at your backyard. So you shouldn't be missing your payments anyways. So what I am trying to say is those banks don't care because they are big, they don't have time to be checking everybody that have a loan with them. But what if you have a loan with, let's say, keybank. Let's say you have a loan with Even Indiana member is big enough that they don't have the time to be checking everybody's loan. But let's say you have a loan with a bank that only have a branch in the city. You can be then sure that they are checking on you every now and then and that can trigger due on sale. So you want to make sure the bank that you have the house with is kind of like medium size to large. Then they don't care, they don't see it, as long as you don't miss your payments On this seat right now. Those are the two things that I remember. I don't know if any.
Speaker 2:I want to say that there are three key components that can trigger due on sale. So number one, big one that always, always gets people with insurance People. Just because now you have the deed in your name, you go and flex your muscle and go and change the insurance. When you change the insurance, what happens is the new coverage you are getting. Those guys will send that new coverage to your lender. When they send it to your lender, your lender check that. Okay, we give the loan to D. Now the coverage is in the name of Ahmed.
Speaker 2:What's going on? That is pretty much you waking the hungry lion up. So there's a way you can do it. I know the follow up question will be, but now the house is in my name, I have to keep the insurance on me so that I get the protection when anything happens. There is a way you can do it without triggering due on sale. That is where the technicality is coming in and you have to be very careful and learn from people that have done it. So, just if it is your trust, if it is your house on your name, moving it inside your trust will not trigger due on sale. So the chance is very, very low. But, like I said, the risk is still there. So you have to be careful of these other factors that I know. The third one I forgot to write number. There's this third point that you have to be very, very careful of. So those are the things that can cause headache when it comes to due on sale being called on a house that gets moved inside LLC or inside a trust.
Speaker 2:I'm not sure, anybody have any addition to that.
Speaker 3:I think it goes back to one of the things we mentioned when we started right, you don't do your own oil change yourself. You don't fix your TTSS. So I would advise the viewer that when you want to transfer that property into your trust, get you a very, very good transaction coordinator, somebody that knows the necessary paperwork, the right way to do it, so that you can save yourself from any due on sale. I mean, you don't want to, because of less than $1,000, have to pay off a mortgage. So quick, invest in that A few hundred dollars. Let somebody that is a professional, let them guide you or help you out in transferring that property into your trust.
Speaker 3:It's not just as easy as a quick claim deed and you think you're good. You never know. You might say, just transferring the property into your trust doesn't really treat the due on sale, but you just never know what bank it is. If it's a small bank, you don't know. Maybe they're even checking every month. So at the same time you want to save yourself from stuff like that. Little things like that can just ruin your day. Imagine you have work and you get an email that says you need to get that money. You know you're going to be able to pay off today or file a foreclosure on that property. You know that's not what you want to think about. You know you should be focused on just taking action and acquiring more properties and letting the professionals protect you behind your back. Right, that's the only thing I wanted to add to that.
Speaker 2:Quick one before we move on. So I hope our audience that has the question it's a very great question, by the way is still hung here. Just because due on sale is called Me, that doesn't mean it's all, it's going to be executed. There's other ways around due on sale. I've never seen anybody lose their house due to do on sale being called. Never seen one. I have a hundred of friends that do this every single day If they have the right people around them.
Speaker 2:Yes, that is the right statement to use. So it is not the end of the world. I mean, we are advising you to take both step approaches. Well, you have to keep in mind as well that you need to let people know what you are doing, ask the right question before you do it when the risk and the benefits and make sure everything even up, or even be the benefit way more than the risk, before you take those actions. Like I said, that is not the end of the world, but if you get a call like this, said in the middle of your work day, like a you have to pay off our loan because now the house that we qualify you for is no longer on your name, if you don't know what to do, then the panic setting you started running up and down.
Speaker 2:Well, it's there. They are simple steps you can take to make sure you can get those things resolved. That's not a topic for today. We already go over our time, but please reach out to me, reach out to you, reach out to Ibrahim, and we can. We can talk more on this, on this topic. So it's up to you.
Speaker 1:Yes, I just want to thank D for coming in tonight and we really appreciate all the knowledge. We are very excited. Thank you so much. How can people reach out to you, d, in case they want to contact you?
Speaker 3:You can always call me. I'm not afraid to try out my number. I want people to be able to call me. I have investment properties I want to sell, so 3179465840. I think I'm going to put that in the chat as well. Oh, I cannot do that because I did not log in my YouTube.
Speaker 2:But again, let me put it again, let me put it in the chat.
Speaker 3:It's 3179465840. Yes, call me. You can text me if I don't pick up my phone. Maybe I'm on the phone with somebody else. Call me. I'm sure you know how to reach. I may not know how to reach Ibrahim, and you know they can also help you out as well. So if you have any questions, let us know.
Speaker 2:Alright Ibrahim. If people want to reach out to you, how can they reach out?
Speaker 1:Yeah, just you know, you can DM me ID routers. Anything concerning real estate, I'd be more than happy to help Back to you, ahmed.
Speaker 2:Yeah, I am your real and the baddest property manager. So just any property management, reach out to me. We are trying our best to make sure you're invested as passive as possible and you are not over leveraging. You are providing good service to the tenants as well, as you are not such changing yourself, leaving money on the table. So that is why we are here for you, so you can reach me on official or even give me a call. So 317-689-7075. I just got that number, so don't judge me on that. Alright, guys, thank you, d. We really, really appreciate you. We will be bringing you back soon.
Speaker 3:I'm always happy to be here. I like hanging out with you guys. If I'm not on the screen, I'm watching, so I'm always happy to be here.
Speaker 1:We appreciate the support. Thank you so much.
Speaker 2:Alright, guys, until next week.
Speaker 3:Stay warm, stay warm.