Jennifer is from Leafy Legal Services. They provide asset protection, entity structuring (LLC), equity stripping, estate planning, checkbook control retirement accounts all geared specifically for real estate investors and entrepreneurs. Before Leafy Legal, she had worked in a business building with her current business partner Brian in a project with a digital marketer. The project had ended earlier than they anticipated, but they both wanted to continue working in the same niche.
From there, Leafy Legal was born. They already had a team versed in asset protection with their business positioned between DIY online ventures to niche law firms. They can be described as bespoke services for investors. While not a law firm, they have an in-house counsel and offer a third of the cost compared to going somewhere else.
Her team has a bold mission statement as she believes they help de-clog the courts of vexatious lawsuits by putting layers of anonymity on property. On top of that, they help the environment and tackle homelessness. Her team works remotely allowing them to save money on commuting and meal costs. The company is then able to pass on these savings from lower overhead costs to their clients. Today, Jennifer talks about what it takes to operate a fully remote team, the litigious scenario faced by real estate investors, and the process of setting up your legal structure to protect your real estate investments.
Remote work is not for everyone as it’s very structured and requires someone to be committed whilst knowing when to stop. Communication needs to be much stronger. This is similar to investors who will be establishing relationships with people in other cities or states. You don’t just look at analytics but also the people. Having both means that you can scale exponentially. The technology we have today already allows us to do online video calls to keep in touch with team members or clients. But the management style needs to be people-centric. There’s a lot less room for opacity. Transparency is very important.
Years of meeting people and going through stuff with them had allowed Jennifer to build an online legal team she can rely on. People respect you when you act out of integrity wherever you’re at.
While she and her partner are not attorneys, they have paralegals who are experts in their field working for them full time. The paperwork just needs to be seen by an attorney. They can figure out during a consultation if a client’s requirements are complicated and need the advice or services of an attorney. If ever, they can include the additional costs for consulting with an attorney in their quote, or they can refer their clients to an attorney they can retain.
Real estate investors at any single stage. Even those who don’t have properties yet can come to her, so she can help them set up their first limited liability company (LLC). She recommends making sure properties are not in their personal name to avoid getting targeted for lawsuits. Before anything happens, get your structure set up.
Get into a call for a consultation since they want to know which state you’re at and what type of business you want to do in real estate. It is multi-family properties or wholesaling. Depending on which, they’ll map it out and determine what type of structure they’ll create. It could be an anonymous LLC, a series LLC, a Delaware Statutory Trust, or even a combination of an LLC and a trust. For most it’s pretty standard, they’ll be able to give a quote just from the things discussed in the call.
For those with partners or extra things, they’ll bring in an attorney who can talk to them and figure things out before they give a quote.
Depending on the state and the type of structure, it could cost from $500 up to several thousand dollars. They’re prices usually come up as several hundred dollars cheaper than their biggest competitor.
For those who don’t own property or anything, LegalZoom is good for making a last will and testament. But for real estate investors owning property, wanting to be anonymous, having actual asset protection and an estate plan that will avoid probate, a pour-over will is better. Should anything happen to you, everything automatically transfers to the trustee without having to go on probate, and the estate keeps on running until you are able to get back or your spouse takes over or your beneficiary is old enough to assume control.
A special type of trust is necessary to protect your equity especially for those living in California, where there is a low homestead exemption, $75,000 for a single person and $100,000 for a couple. Those amounts won’t even buy you a house. Everything else outside of that amount could be potential targets for a lawsuit.
People without money get desperate and will do anything, especially at times of recession. They could have seen your house and car, followed you, and then fell on your car. Even if it’s just a small amount, their attorneys will put a lien on your house and take you to court.
During mediation, you could have the strongest evidence to prove them wrong. But their attorney will still opt to push through going to court. You’ll be dealing with costs you’ll have to incur defending yourself in court. But you won’t be able to recoup some of the costs because the one suing you doesn’t have any money. So you’ll be paying someone for nothing.
But with asset protection, it won’t even reach that point. Once their attorney does his research, he’ll find that the equity is somewhere else. Then he’ll inform the person trying to sue you that he doesn’t have a case because the attorney won’t make money off of it.
Businesses and deeds are public records, and attorneys have skip tracers and access to lists. They’ll be able to do research and get information very quickly.
You’ll have an operating LLC, but the property will be under either an anonymous land trust or a Delaware Statutory Trust (for those in California). As long as you haven’t done anything illegal, anyone wanting to target you won’t have the time, effort, money, and anger to pierce the corporate veil and find those properties.
It’ll be structured in such a way that there will be arm’s-length clauses and multiple layers of protection between how you operate your day to day business and what you own.
It operates in a similar manner to a series LLC with some differences. There are different trustees under it – a main, parent trust and offshoot trusts under it. Every property you own will be held by three different structures. They have anonymous clauses that would have to be broken open to get to the property. Even when someone is able to do that, they won’t be able to get to your other properties. They’ll have to do that for all properties.
Compared to a series LLC, in a DST, you can put in it your personal residence, vacation residence, a shopping mall or even an airport. It’s the only one recognized in California, Delaware, and Massachusetts. A series LLC is only recognized in certain states, and it is only allowed in 18 states as an instrument you can get inside of that state.
It’s not perfect though because a DST can be broken in times of divorce, and your accounting should be correct. The paperwork should show that the trust is funded.
They do everything in their own name or they’re co-mingling funds. They don’t separate their business accounts and personal accounts even when they have an LLC.
Law firms have so much overhead and regulatory tape. Since they don’t have a lot of overhead, they are able to re-invest into education through a podcast and blog. There’s also an upcoming expansion where there would be a membership site for people to get involved in. They’re focusing on building a strong community. Getting connected with someone already filtering out the good and the bad is going to be important since you’ll be getting value.
They believe in education. They think it’s the quickest way to reach an audience who cares about what they care about. Just go to their website and you’ll get access to their podcast.
The mindset is so overlooked. The quicker that you get your skin in the game, the better. You’re going to make mistakes, so at least have a plan. Get your structure in order. If you make a mistake, it won’t be one that will put you out of the game forever.
Don’t go at it alone. Get your entity set up. You’re creating a brand and a business. Have a plan of how you’re going to scale up. The people who have planned are much more successful than those who just wing it. There’s a great mix between having a plane and building the plane as you’re flying it. You can merge those together and just be as successful and innovative.
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