Protecting Your Assets With Creative LLC Structures – Naya Zhao

Sean: [00:00:00] Thank you so much for being on the show today go ahead and introduce yourself and let us know who you are and what you do.

Naya: [00:00:05] Hi, Sean. Hi everyone. My name is Naya Zhao. I live in the San Francisco Bay Area. My profession is in finance. So I’m an insurance broker and also a real estate investor, and I’ve been working with the real estate investors in the last four years. I jump into the deal with my own money started and two years ago. I always know there’s money in real estate. And I work with the investors and hundred percent of them made their wealth through real estate investment. But I’m always afraid because in 2009 I got sued by a real estate case and it’s actually my own house. The reason I got sued is in 2002 when the housing market was down I bought the house, and in 2006 I sold my house and my profit was about 400K. The thing is, you know in California after you sell the house within three years they can sue you for any reason even though it was sold as is. So that lawsuit, after they opened I talked to the lawyer and they said it’s totally nuisance lawsuit. However, as you know this country, when you sue people you don’t need to pay because they’re a contingency lawyer. As long as the lawyer know who you’re suing for has money, the lawyer will be happy to jump on the case to find whatever the reason to get some money out because they will get 1/3. So I had to find another lawyer to respond. They sue me with a contingency lawyer and I have to respond with a very expensive real estate lawyer and I was hoping just to get this over with a strong lawyer who’s knowledgeable, we can get this over very quickly. However, because the other lawyer know we got money and you know, he has nothing else to do and the person who bought my house was desperate looking for money from different sources, she lost her job in 2009 and the house price dropped. In 2010 it dropped even more, so she wants to just get whatever she can get. She wouldn’t give up. So this dragged me for a year and I spent $50,000 lawyer’s fee. So after that, I talked to my lawyer. I said “When is this going to be finished?” He said “I don’t know. This probably will go on for another six months to a year until we go to court.” And I was shocked, I said “Are you kidding me? You mean I’m going to spend this kind of bill, lawyer bill for another six months to a year?” “Yeah,” he said “pretty much” So in that case, that’s really just… it ended up to be a disaster. But the good thing is 2013-2014, house markets are turning around and the case actually never went anywhere but I spent tons of money. It caused a big disaster in my life and that’s what burned me and made me afraid of going back to real estate investment. Until I met Anderson Group and I talked to them about, you know, I said “What if, okay, at the time I have you guys as my lawyer, what would you do to make a different result? or for this lawsuit to not even happen?” And they gave me a very very good solution and after I heard it I decided to hire them. And I hired them about two years ago. And that is why I’m confident enough to jump back to real estate investment by myself and with my own money. Prior to that I was helping investors and believe me, every day I see how much they make with my help. I’m like “Dang, I hope this is my own case. I hope this money is going to my account!” And I got a very small portion of it because I didn’t take the risk, right? So anyway, I want to share with you. With the right protection, you will have a lot more confidence. You will make a lot more money, get no distraction a lot less distraction. Yeah. I cannot wait to share what I’m about to share with you.

Sean: [00:04:26] Perfect. So go ahead and just give us an overview of what is Anderson Group and what kind of services do they do and they provide?

Naya: [00:04:34] Okay, Anderson Group is a law firm and a CPA firm. They combined together. They serve real estate investors specifically so you have it the worst case don’t go to them. If you have a real estate investment case go to them. And if you thinking, you know, I’m going to let’s say wholesale, and I’m going to do this wholesale deal and I don’t want to have any legal issue. I believe lots of wholesaler think they have this assignment agreement, I’ll get assignment fee. This is fine. But is there any legal issue after this? You don’t know, you just do think it’s fine. You heard it’s fine. You don’t know. A lot of flippers think, you know, as long as I use my LLC to do this fix and flip deal then I’m fine. I actually talked to some flippers. I asked people how do you go on deals? They say, “Oh, you know, we joint venture, me and couple other friends. We put the money together, we fix it and we sell it and we split the money.” And I ask whose company were you using? “Oh, it’s my company.” So what do you do? “Oh, yeah, I cut a check to my friends.” Then I asked you after and I say,”What do you do with your LLC after that case?” “Oh, nothing. I take another case. ” “Do you know you’re taking a risk by doing that? Let’s say you flip house number one, house number two, house number four. House number one comes back and sue you. And you stuck at house number four. So what happens to you is your house number four have to pay the price for whatever it is suing you. Or maybe you already bought house number 5 at that time. So whoever sold the house, just like me I sold the house, I have three years responsibility to carry on. The best way is shut down that LLC. After you sell house number one, you shut it down and use create another LLC for house number two. Now the next question is “Wow. That is so expensive. You know that can add a lot of cost. Not only the LLC fee but also, you know, the lawyer or the CPA who created the LLC. I have to say there are ways that you can get around that. For example, the LLC the first year, you don’t pay for that eight hundred dollars. Okay, and the number two if you want to hire people to create an LLC, there’s a $1,500 of fee, however you can go for as low as $500 fee. However, those people are normally CPAs or tax attorney and the way they create LLC is for tax purposes. Their goal is make you and help you to pay last tax. But what about legal perspective? What we’re worried about tax is actually small money compared to the legal responsibility and liability. So now we need to think of what is the right structure for our LLC and costs us the least. and Anderson Group is very strong and very professional on that. And if you join their program actually all the LLC is for free for the rest of your life. And that is the best way to do it because you can create a thousand LLC for the next 20, 30, 40 years and you don’t need to pay for the fee again. That’s the number one benefit. Number two benefit is if you join the package that they offer, you can have unlimited law consultation. And you call them, you schedule time with them, and then their law professional call you back and also the CPA tax professional will call you back too. So for that it’s worth a lot. I hope we don’t just say “I think we’re fine. My friend told me I’m fine. My family law attorney told me I should be okayed in these things.” So if you have to fix your teeth, you don’t go to an eye doctor. So you go to the you know the dentist. So what I’m saying is let’s go to professional and find out what we can do. I want to Sean’s meet up and I talked to some people. A lot of people actually are already using Anderson Group. Those people they went to the real estate investment training or professional. Like I went to like two years training, real estate investment professional training. So those people that are well-connected in the real estate industry, Anderson Group is very very well known law firm to protect investors.

Sean: [00:09:23] Very nice synopsis of their services. So I mean basically you’re saying that if you had a property in California, they can just come back and sue you for whatever reason they want?

Naya: [00:09:32] They can. they can come back to sue you. Three years.

Sean: [00:09:35] And for the most part, it is probably because they’re undergoing their own like financial difficulties. So they don’t care. They can throw it on nuisance lawsuit because they have a lot of contingency lawyer, the lawyer doesn’t care as long as they see that there’s potential to make money, then they’ll go after you. But the whole point of creating your LLC structures like this is that you create an LLC for this one particular project, after it’s done you make a profit, you close it so it’s gone. So now the lawyer when he looks back it’s like very hard to find who actually owns it, right, because you have to prove now, “Oh this person owns it. This person has money, etc.” Is that right?

Naya: [00:10:13] Yes, that’s true. Let’s say if we buy a house and this house is owned by a foreigner. After we buy, this Foreigner went back to his own country and you want to sue. Who do you sue? You don’t even know where to find that person. That person disappeared. This is exactly how LLC works. So we cut the responsibility immediately. We finish it. Okay. So if they want to, from day one, we sold the house we close it. That’s all. So nobody will be able to come after us especially for flippers. If you sell a house, then you have multiple other houses coming into your LLC and you keep doing deals. All your deals in the LLC is facing danger and the more houses you sell the more potential lawsuits you’re exposed to. So why do that?

Sean: [00:11:07] Yeah, but can’t they just go after the owners of the LLC?

Naya: [00:11:11] Well, LLC is a limited liability company. So whatever happens here stops here. Yeah, so that’s a good protection. However, your LLC have to do right. Like all the paperwork structure has to be right in order to be treated as LLC. Like it should all be legalized. Okay, and also there’s meetings, there’s all kinds of paperwork you need to do. And if you don’t do it right, the other lawyer can find a gap. It may not even be treated as LLC. So in that case the owner of the LLC will be responsible. You’re personally will be responsible. But if you did everything, right? Yes, it’s LLC. However, what is right? CPAs has a CPA’s way to say it’s right. Tax attorney has their way and real estate attorney has their way to say it. We need to have a professional to take a look and make sure; they’re our gatekeeper.

Sean: [00:12:10] Right, because you could do it yourself on legalzoom.com, but you may be doing it wrong. And then ultimately when you do it, what’s the point? You’re going to be sued anyways, if they want to find a hole in your product.

Naya: [00:12:23] Yeah, so your real estate investment is a very profitable business and very high risk. It is. And I experienced that. I lost a lot of money through that lawsuit. I mean, we never went to court, but the my lawyer’s fee was a stupid thing. It cost me a lot and it cost me a lot of stress. What I’m passionate about is I hope you guys don’t make the same mistake. I hope the same thing doesn’t happen to you. And I was talking to a friend the other day and he said if you haven’t had a lawsuit yet, that means you haven’t done big enough of the business. If you want to grow big sooner or later, you will be served the paperwork. So let’s get ourselves protected. So the package don’t change. If you just get into the package,you will get educated and you will understand what’s going on. And at least when people talk to you, you know, “Okay this thing I can do. That thing I cannot do.” And if you come to our class, even in the class you will learn so much like how your business card needs to be printed; why you have to print it this way versus the way you normally do. And even your business card if you don’t do it right, you’re personally liable to the company responsibility. You’re misrepresenting. And if you don’t sign your document right, you’re also personally liable. So whatever the loan, whatever the document agreement is not in LLC’s responsibility, only is in LLC and on you. So we have to get all of this done right. You think all you know is LLC, that’s fine. You know, somebody got to sign the paperwork, who’s going to do it, and how to do it right. Those are very basic stuff that I think a lot of people don’t even know.

Sean: [00:14:19] Of course. Most of us don’t know. I need to know.

Naya: [00:14:23] You need to come to the class, right?

Sean: [00:14:26] So let me ask you, I heard that… First of all, single member LLC. I’ve heard that single member LLC doesn’t provide protection because you’re the only one right? So they’re going to go after you directly. Is that true?

Naya: [00:14:40] It’s treated as a sole proprietor. The thing is with Anderson Group’s help, even though it’s your own company, it will not be a single member LLC. They have ways to structure this.

Sean: [00:14:54] Do you happen to know more details on that?

Naya: [00:14:57] I can give you some idea. They create multiple companies for you. And you know, if you join their membership, those companies don’t cost you anything with Anderson’s help, right? So, well it cost you but only to the state, whatever the state cost you for the filing fee, but Anderson Group no longer charge you for the for creating those LLC.

Sean: [00:15:20] And filing fee is like a hundred bucks or something, right?

Naya: [00:15:23] Yeah, very very affordable. And by the way, Anderson Group, even if it’s a law firm and CPA firm, because they are specifically helping real estate brokers and agents and investors, they made a package very affordable too. I just don’t know which package you will fit into. But when you talk to an advisor, they will show you which one. And then I tell you compared to what you hear from other places, it is very affordable. Yeah just check with them and you’ll find out. So what happened is, to answer your question Sean, how to do that. You can have multiple LLCs and each LLC shows up like an individual entity. So your new flipper LLC, it could be a joining member; one is you and one is one of your other LLC joint venture. So in that way it is not one member, not a single member LLC.

Sean: [00:16:21] Interesting.

Naya: [00:16:21] The law is there to give us restrictions. But the law is also there to help us and if you understand well and you know how to play, you know how to get around that, you will get so much benefit. If you don’t, it will get you in so much trouble.

Sean: [00:16:40] That’s a really good tip. I never thought of it that way. Now another thing that people say is why get an LLC when you can spend the same amount of money and just get umbrella insurance instead?

Naya: [00:16:51] Well, I am an insurance broker myself. I don’t sell house insurance, but I know a lot about it. So policies cover you for things the policy promised to cover you. If you read your umbrella policy, there’s so many other things that don’t cover you. Back to what I said, three years after you sold the house you no longer have an umbrella policy. In that three years if anybody sues you your policy will not cover you.

Sean: [00:17:18] It doesn’t cover properties that you sold already?

Naya: [00:17:22] policy only covers you when you pay for it. And when you have an umbrella policy, you have to list all you have: your cars, your house, whatever you have, your responsibility there right?And that house that was sold, it’s not the in that list. You didn’t pay for that. Okay, that’s number one thing. Number two for umbrella policy. I’m just bringing out some very obvious things. Number two, your umbrella policy doesn’t cover you environmental costs. Let’s say your I rent your house. I have long hair. I like to shower and I make this steam, you know in the in the bathroom and I don’t even open the windows. So over time it’s going to generate black mold. Whose fault is that? Well if you and I talk,it’s my fault, right? But legally it’s your fault because you’re the landlord and your house has black mold. Now my house is you know is suffering and I’m sacrificing from this and that problem caused by black mode. I can find the contingency lawyer to sue you and your umbrella policy will not cover that. So please don’t think you have umbrella policy and that is the answer. It is part of the answer,but is not the whole answer. People can sue you for all those nonsense things like the lawsuit I had. People sue me say “Oh the house, you did a lot of remodeling job without a permit. So I’m suing you” I said, “No we have a permit.” We went to the city. Went to get a record and city lost the record. Good thing is the we had a record. So we find our own records, show them and they said “Okay. All right” They never pursued that reason. But because they open case at the end of three years, that three years limits don’t work anymore so they can sue me even on the fourth year. And the first year she said “When I bought the house you said downstairs can be rented out and I cannot rent it out, the city doesn’t allow me so I sue you for fraud.” Isn’t that ridiculous? You know what, she rented the house to four different people and suddenly the neighborhood has four new cars and the neighbors complain. So the city came over to see. She rented 3 bedroom to 4 different people. The city shut her down so you can only rent it to one person or one family. So she sue us for that income loss. It is ridiculous, but you have to respond. So your umbrella policies don’t cover anything like that either, right?

Sean: [00:20:00] By the way, what city was that?

Naya: [00:20:02] It was San Bruno.

Sean: [00:20:03] So San Bruno has bad renter policies.

Naya: [00:20:06] I don’t know that but if you talk to other cities, I don’t know, but the thing is the city rules could change at any time. Let me tell you, I bought the house for 600,000. I sold it for 968,000 and I spent like almost 100K on the lawsuit just for the lawyer and fighting through all the hassle. Just a couple months ago I checked that house, it’s 1.4 million. You know what I want to do? I just want to kick her butt and say “what did you do lady? You know? Yeah because you’re desperate and you lend your attention on me and you caused such a disaster, right?” And actually she’s fine. Now she’s doing well with the house, but what about all the hassle and the financial loss caused to me. However, I asked Anderson Group if what I do in is the correct way. They showed me. After they showed me I was like, “Oh my gosh, that is so clever!” You know in California if you sell the house in an LLC, you don’t get the tax benefit like $250,000 tax exemption for per person, right? If you’re a couple you have 500k, but you don’t get that benefit if you sell houses through LLC. But if you sell with your own name, you get a tax benefit, but you don’t protect yourself from being sued. So I asked Anderson Group of what do I do. And they gave me a very good strategy and with that strategy I can take my tax benefit. I can also cut my liability immediately so nobody can sue me, not even within three years.

Sean: [00:21:48] Wow. So what was that strategy?

Naya: [00:21:50] How familiar are you with the Land Trust?

Sean: [00:21:54] Not at all. So go ahead and just let us know.

Naya: [00:21:57] So, you know Family Trust right? Living Trust. Land trust is another trust that’s just like Living trust but it’s like its own entity. And basically what they showed me to do is transfer my house under my Land trust. With Land Trust I still get the tax benefit, but I’m not the owner. The land trust is the owner. I’m the beneficiary. So it’s the same legally. Liability-wise I’m the beneficiary but the land trust is also owned by another LLC in other state. So basically when Land trust sell the house, it sells to the LLC and then so because the Land trust and I are you know, get the same tax benefit, so I can still get that half million tax benefit me and my husband. However, when we really sell to the to another party, it’s not through the Land trust. It’s through the LLC sold to another party. Then after that we close the LLC and because Land trust has sold the house already, the Land trust will be closed too. So there are two layers protection. Whoever bought the house they can sue the LLC. The LLC is gone. Then they can sue the previous owner, previous owner is a land trust. Land trust is gone too. So in that case I can walk away totally clean.

Sean: [00:23:18] Very cool. It seems like everyone who owns a house should do this structure.

Naya: [00:23:22] I think so. I really think so. And I was talking to a friend the other day. I said, “You know, have you thought about it? Have you heard about the case like a very nice kind person who’s never done anything wrong. Boom. He did one stupid thing, one stupid thing. He didn’t even know he did something wrong or stupid but he got thrown in jail or got penalized. You know, he got himself in trouble. But another person who is totally criminal and fraud and he’s you know been doing this forever and he’s still hanging out there drinking coffee. You know sitting on the bar, having a glass of wine with others and he’s fine. He’s a criminal. Do you know what’s the difference?” And my friends say “What’s the difference?” I say because one knows that he’s gonna get himself in trouble. So before he even started he got himself well-protected. He knows how to exit the problem, the trouble. He knows how to walk away clean. And yeah, so he knows what he’s doing is very risky, so he’s well prepared. The nice person is not. The nice person is always nice. Don’t do anything wrong, had no bad intention. And yeah, so he never thought about the need to protect himself. The problem is you don’t know when somebody’s going to go after you. You don’t know when they’re going to do something stupid. And when that happens you’re going to pay a price.

Sean: [00:24:59] Yeah, so interesting. So by the way, let’s go back to your land trust thing. How soon before you sell your house are you going to do this?

Naya: [00:25:06] Immediately after you get a loan. So you have a you buy a house you get a loan right? After you get a house, you should have a land trust. So in that way the house is not under your name. I’m not a lawyer and I should not give too much instructions, but this is what I learned and this is what I would do for my own case.

Sean: [00:25:27] Create Land Trust, create an LLC to buy the land trust. Oh I mean to own the land trust.

Naya: [00:25:32] Well you need to talk to a lawyer. In my case it’s the LLC who will get my land trust.

Sean: [00:25:38] So I guess the downside to this strategy that you’re paying a little bit extra every year for holding this Land trust and the LLC right?

Naya: [00:25:47] Land trust, you don’t need to pay for it. It’s just a Living trust that after you create a Living trust you don’t to pay for it every year. You just have it.

Sean: [00:25:54] Oh, you just had to set it up, right?

Naya: [00:25:57] Yeah.

Sean: [00:25:58] Yeah, and you pay 800 bucks a year for the LLC to own your property.

Naya: [00:26:01] Well the thing is you don’t have to have LLC in California. In this case you can have LLC as a protection state.

Sean: [00:26:09] Such as like Delaware?

Naya: [00:26:12] Yeah, Delaware, Wyoming, you know. You need to talk to the lawyer to discuss the details. So in that, you know States, the cost of LLC is very very low. It’s not the $800.

Sean: [00:26:25] Make sense. So what’s the downside then? I’m really curious.

Naya: [00:26:29] I haven’t seen any down side. All I see is you do need to spend some time to listen to the class, you know, and see what you need to do. So that is an investment of three days of your time for this class. And of course, there’s a ticket. The ticket is a $197 for two people and I don’t think time and money is a problem to our investors. The thing is people don’t see the value and don’t see what this can bring to me. And I can tell you, Anderson Group, last time I checked was a couple years ago. Okay, they have 17,000 customers and they help people save tons of money every year. Think about it like my case in one year. I spent $50,000 on the lawsuit. What do I get? I get nothing but hassle. But if you have a right protection, the other lawyer will say, “You know, Naya has nothing. Maybe she has something but it’s very very difficult to find where they are. And with that kind of, you know setup.I believe she’s already prepared for today for being sued. So why are we going to a tough cookie and go after her? There are plenty easy cases we can go after. So you can find another attorney. I’m going to move on with my next client in that case.” You’re safe, right?

Sean: [00:28:00] Yeah makes sense. If it’s a hassle for them to find your assets, then they’re gonna be like “Nah, not worth our time” Because they’re contingency lawyers. They don’t get paid unless they win.

Naya: [00:28:09] Exactly and they can take like six months to win for people to settle or they can take years and still not win. And why go for years of hassle and not finding anything? Or even at the end if you find something, is it worth your time? So they don’t want to do those tough cookie case.

Sean: [00:28:28] Yeah makes sense. So who is the structure usually for? Like, is it usually for flippers or you know, buy-and-hold investors? What kind of person should have multiple LLCs for each property?

Naya: [00:28:39] I think anybody who has a real estate should get yourself protected. I think flippers has much higher chance to be sued for house remodeling part but property owners, buy-and-hold people, you should think about it too because every renter will be able to sue you. If they have anything going on they can go after you anytime. So it depends on how much you want to lose. If you say “oh I only have two houses. If I lose them it’s fine.” Now the big deal don’t do it. The thing is even if you only have two houses. You don’t want the two houses to be directly under your name because you may have stocks too and you may have savings, you may have other investments. Those are totally innocent accounts, but they can be sued because some of them can go after you and they can go after everything you have.

Sean: [00:29:31] I’ve heard even if it’s not you, like, let’s say you have a kid and your kid does something bad and then they sue you because you have a kid. They can go after all those assets too right?

Naya: [00:29:43] You’re absolutely right. I have a 17-year old boy and he bought his truck at age 16. Now he’s driving everywhere. Well, does he drink? Does he smoke any pot? Do I have a hundred percent control of that? I don’t have the confidence to say he doesn’t do any of this. Okay, I don’t. So the result after this is anything could happen. Even though he didn’t take any alcohol or you know, smoke anything, I still think there’s a chance, there’s a risk. However, if he does, that’s much much higher risk and his friends talking and you know, they’re just in a happy moment. Things just happen in one second, less than a second. So when that happens what’s going to happen to your asset? Legally you’re responsible to that and the car is under your name and yeah people are going to go after you. I just heard a case. So there’s a someone driving in Stanford area and there’s a kid who is a Stanford Master’s student. So his hoodie was on, the earphone was locked in, he was on skateboard. Very cool, very handsome movement, and there’s a car coming and totally ran him over. It was a night. He’s dressed black. Okay. So what happened is he’s, well it didn’t kill him, but he was totally destroyed. So his family sued the car driver for five million dollars. Okay? So when in that case how much umbrella policy you bought? And yeah, after the umbrella policy what’s going to happen? That kid is destroyed. All those years, all investment the parents put in there, all his future potential earning and you know everything that can be calculated into why we’re going to go after those 5 million. He needs care. Somebody’s going to take care of him for the rest of his life and he’s a young kid. So do you have the money to pay for all of this? It’s totally your kid’s fault, right? The driver’s fault. So now what? I can say it’s your fault, that you got to pay the price. But don’t you want to have some control of that? If you’re a good person you can write a check to them. But you don’t want people to go after everything you have especially if it’s ridiculous things. Sometimes people just go after you because they don’t have money and they find some ridiculous reason and they know you have money and you can afford it and you don’t want to go through the trouble. I mean, what is the money you don’t want to lose, 300K, 500K or Five million?

Sean: [00:32:34] Cool. So we’re talking last time and you gave me one really interesting tip of I guess hiding your assets. It’s like, you have a property here. Oh when the lawyer comes to sue that LLC they can see the property there with a lot of equity but we’re able to do something to make it seem like there’s no equity on the property. Are you gonna share that technique with us?

Naya: [00:32:55] I’ll share with you for my own case.

Sean: [00:32:59] Okay, so wait this is legal right? Like it’s not shady.

Naya: [00:33:03] No, it’s not shady. It’s okay. I follow the rules and laws all the time. I just don’t want to give people a lot of advice when I’m not a lawyer but I can share with you my own case.

Sean: [00:33:18] This is just an example of something that you learned right? So it’s okay you’re sharing for me. You’re not giving them like this is how you do it.

Naya: [00:33:26] I’m saying what other people would do. Let’s say if you have a $1,000,000 house and this is an investment property. And with the investment property your minimum, you put 20% down or 30% down right? In this case. Let’s just say the house has a 300K equity and 700k mortgage. So if a lawyer go after you for this house, they can see even if the house is in our LLC, they can see they still can have 300K to come out and go after and the lawyer you can still get a 100K himself. So it’s a pretty good deal. What can we do to stop them to even think about it going after us? We can make them, make the house look like… the house really has equity but even then they cannot get anything. How do we do that is we all know the first mortgage is 700k and then after that the 300K is equity in there. What if we put a half million dollar lien on this house? So the lien come before this new lawsuit claim, right? So even the house is forced to be sold, the first 700,000 is going to go to bank and then after that the 300K will get to pay for the lien. There’s a half million dollars lien. What does this lawyer get? Nothing. So will the lawyer even go after you? Absolutely not. What for? Just remember, lawyers like to sue rich people not poor people. You got nothing to go after so it’s not worth their time. Let’s just make our self… we can act rich; we can go to an expensive restaurant, drive a nice car,and live in a luxury house. Everything is fine. But you know everything there is a there’s a lien or there’s really not much equity for them to go after. Who put those lien on you? It’s a trick. It’s also legal. You just need to learn that. You actually can have another company, it’s also your company, put a lien, a friendly lien on this one. So before you sell the house, you can remove that lien with your own power or if you don’t want to sell the house, you can put a lien there and so preventing lawsuit.

Sean: [00:35:48] That’s crazy. You just create another company and you put a lien on your own house. Well, I guess maybe this one company creates liens on all your houses and then just remove them as before you sell them.

Naya: [00:35:59] Well, there’s different tricks. I don’t know how to do exactly the details. My lawyer handles everything for me. Yeah, you need to get a lawyer to help you with all of this.

Sean: [00:36:11] Yeah, that’s so interesting and so many techniques. It’s just like we don’t even think about it but for another company this all they do. All they do is find creative ways to protect your assets.

Naya: [00:36:21] And it’s all legal. And then the thing is, you know, we’re in California. California law as a protection law, it really is not good. It’s not to our favorite but Anderson Group is they have those techniques from different state because they have offices in different states. So that’s their job. You know, if it’s talking about science, if scientists study this specific thing, that’s what they study specifically. Okay. So how do we protect our real estate investors? The thing is it’s all legal. And people will say “Oh they’re playing games.” You know what, if it’s a game is and it’s legal then that’s a good game.

Sean: [00:37:08] That’s right. You play a good game. Just like CPAs, right? You hire a CPA. Why? Because they understand the tax law better than you do so they can find ways to save you money than if you were to do it yourself.

Naya: [00:37:21] And if you hire Anderson Group you actually can send them your last two years tax returns and they will review it for free just to see if you overpaid any tax, income tax in the last two years as a real estate investor. Just because there are many many ways you can save money. But we don’t know that and again our tax attorney and CPA, they’re not in the real estate industry. So there are many many other ways and code and sections that they don’t even know how to do that and they don’t even know that can save money but Anderson Group people they can do it. That’s what they do every day.

Sean: [00:37:59] And are they based in California or how are the operations work?

Naya: [00:38:04] Well their lawyers have California license. But their office is not in California. It’s in Nevada and a couple other states. Based on good asset protection states. So the beauty of it is they can use other states’ law to protect your California property or California investors. So if your lawyer is in California and they don’t have any other states license in asset protection states, your lawyer actually don’t know much. I share this story with you. I have a very very good friend who’s also my trust attorney. So I have my living trust everything set up with him; very high-end expensive lawyer. However, when I talked to him about asset protection, he said as a protection is bullshit, I say why do you say that? He said because if there’s a court order you get to disclose everything. So there’s no real asset protection. And i say you know what you’re absolutely correct. If there’s a court order you got to disclose everything. But the goal of setting up as a protection is we don’t need to reach the stage that we have to even go to a lawsuit. So when the other person or the other lawyer see you have nothing you absolutely have nothing. What do they bring you to court for? Right? And from the day they sue you until the court day, it could take more than a year. And in between there are lots of work to do. Why do they bring you? Somebody has nothing to court if a homeless make you fall down or punch you in the face, would you sue him? You got out of be out of your mind to sue somebody who has nothing, right? So it’s not worth it. So that’s what asset protection is all about. So this lawyer friend heard me and he was like, yeah, whatever kind of thing, he didn’t really care. Half year ago, he moved to Nevada. He moved to Las Vegas due to high California state tax. He said “I’m going to move there and make a lot of money. That 10% really makes a big difference.” Okay, fine. He moved there. He passed the Nevada bar and he went to lawyer association in Nevada. And a couple weeks later he said “Naya, you know tell me more about what you learned about asset protection.” I said “Why are you interested?” and we were just teasing each other. He said, “you know, I’m now in Nevada and asset protection is such a big topic and I really want to get into this so I can help my clients in California and I can make a lot more money.” So why I’m sharing this with you is a lot of lawyers, California lawyers don’t even know much about asset protection. Maybe they think it’s not even worth it or they don’t know enough to talk about it to support as a protection idea. So don’t let that fool you. They don’t know everything and you may know more than them in certain topics. So yeah take it upon yourself to see how you can protect yourself.

Sean: [00:41:21] Yeah, that’s super interesting. So where can we go to take this class? You said it’s coming up pretty soon.

Naya: [00:41:28] Yeah, it’s coming up in Burlingame Marriott Hotel. And the date is August 9th, 10th, and 11th.

Sean: [00:41:33] Nice. August 9,10,11 at the Burlingame Hotel. Basically the one near the airport, right SFO?

Naya: [00:41:43] Yeah, it’s near the airport and you can register online. The ticket price is $197. You can bring a friend with you for all three days. They’re really not making any money from this event. To take it is really just to cover the cost for the event, but you will learn a lot and it takes three days to learn how to protect yourself. It will save you three months or three years of hassle are many many years of hassle.

Sean: [00:42:13] Yeah, and tens of thousands of dollars in lawsuit fees.

Naya: [00:42:15] Exactly don’t cover your eyes and pray and hope everything is fine. It’s not. It just takes one desperate sneaky person to get on your back. It will be a lot more than three days to get them off.

Sean: [00:42:29] Exactly. Is there anything else you think our listeners should know before we end the show today?

Naya: [00:42:35] I think there are many many things people should know. the thing is I think first of all we need to learn how to protect ourselves, and so to prevent a lawsuit. Number two is how we can save our money from income tax from IRS in a legal way. Okay. And yeah number three is if you do have an LLC, you think about how we can structure this right to limit our liability. Let’s say you and me Sean, we create our LLC. Okay, you and I are partners. We each invested half million to the company. Couple months later we’re going on a deal and I’m being sued and I lost the case. So my credit are going to take over my 50% ownership. Would you like to work with my creditor, that you don’t even know who they are? And you know, they’re sneaky or you know, that that person has no experience. Whatever you know about that person, do you want to jump into that case with the creditor? I’m out of the picture now. He got whatever I got. You don’t want to do that, right? So how do you still use my money in the LLC and move forward, but you don’t gather the other new creditor or new partners, control and impact into your business plan? Those things are very very important to you.

Sean: [00:44:00] Yeah, that’s super interesting and something that people don’t even think about.

Naya: [00:44:03] People don’t. Those all should be in your partnership agreement. So when I create a LLC with Anderson Group, the binder are really really thick and there’s many many pages talking about it. And so basically they say if this happened, this is what you need to do. If that happened, this is what you need to do. And that’s the agreement. So if something happened we can pull out. Okay, we’re protected by this sentence, were protected by that sentence. But if you don’t have it, you’re not protected by that. Another thing is a couple years ago. One of my CPAs created my LLC and he only charged $500. So I was like, okay cool. Great. So other people charge me 1,500 you’re only charging 500. And the paperwork I got back is like pages like, you know less than 30 pages and I said “Hey how come it’s so little?” and he said all the rest is useless. You don’t need it. And I was like, “oh, okay fine. Those are boilerplate. I don’t really need it.” But now I know more I got it. You don’t need it. You don’t need it yet.

Sean: [00:45:16] That’s right. You don’t need it. You actually need it. Just like sure it’s like Insurance. You don’t need insurance until something bad happens, and then when something bad happens you better hope you have the right policy.

Naya: [00:45:26] Exactly, exactly.

Sean: [00:45:28] Cool. So thank you very much for being on the show today. How can people get in contact with you?

Naya: [00:45:32] Well, you can call me or you can go to our link to book the ticket. You have any questions or you forgot, you don’t know how to book online, you can call me. My number is 650 922 7032. The link is aba.link/naya, so when you go to that link, you will see the event landing page.

Sean: [00:46:04] Cool and I’ll put a link again on the show notes as well for people to use.

Naya: [00:46:08] All right. Thank you Sean.

Sean: [00:46:10] So thank you again Naya for all your information today. I’m sure anyone that’ll listen to this episode will be pretty interested in taking another look at their legal structure to make sure they’re correctly protected.

Naya: [00:46:21] Exactly, it’s very important. Thank you everyone for your time. I hope to see you in the event.

Sean: [00:46:26] Yeah. I’ll be there. So I’ll see you there, too. Alright. Thank you.

Naya: [00:46:30] Bye.