Want to feel like a wanted man?
Or how about walking about with the feeling like there’s a target on your back?
You wouldn’t know it, but for a lot of property investors, that’s just about what happening to them…
Because they have made it through the first part of becoming successful real estate investors.
Too bad they’ve let everyone in the world know about it…
Without taking any precautions.
Of course, I’m not talking about my students who are on video telling you how well they’ve done…
They’re bloody proud of themselves and have every right to be.
I’m referring to those that have built up their property portfolio…
And still own all the properties in their own name.
Are you begging to be sued?
If you’re doing that—or have done it…
You’re asking—no begging–for someone to come and take it all away…
And believe me it happens.
One of the ironies of building a property portfolio…
Is that it’s not unusual to find a seller who needs to sell a property because he needs to raise cash…
To pay for his legal defense.
This happens quite frequently.
Another irony is that it’s often one of the seller’s own tenants who is suing him…
And it’s not like there aren’t enough lawyers in Oz…
Throw a rock and you’ll likely hit one in Sydney or Melbourne.
The problem with lawsuits…
Other than the fact that some bloke wants to put your money into his pocket…
Is that one lawsuit can attract others…
“Me too” lawsuits
It’s the “me too” attitude.
You know how that one goes, don’t you?
One of your tenants trips on a garden hose and breaks his arm falling down…
And files a lawsuit against you for damages.
Then he says he feels dizzy and has trouble concentrating at work…
Because he also bumped his head in the fall…
On a piece of old garden furniture that had no business being there.
The attorney engage in what the legal world calls “discovery”…
Which they say is about discovering all the evidence…
But which really means discovering how much of your money they can really take.
This involves interviewing other tenants as witnesses…
And will quite possibly turn out other “violations” and even “injuries” caused by those violations…
Do you see where I’m going with this?
It’s not hard to understand…
It’s just hard to defend.
They may be in the wrong for the most part…
But it may well cost you $250,000—or much more–in legal fees to prove that in court.
It’s a case of the weak (your tenants), taking on the strong (you)…
Or put another way, the poor against the wealthy.
And quite often, those cases end up making the strong, much weaker…
And the wealthy–much less so.
Tenants encouraged to file lawsuits
Of course, it doesn’t help that some lawyers advertise their services as if they were selling used cars…
They’re practically creating injury and damages in the minds of your tenants just by their advertisements alone…
And then, just a quick search on the internet will tell them just how deep your pockets go, won’t it?
“Ah!” The attorney says to himself…
Look at all these properties this bloke owns in his own name…
“I’ll bet there’s plenty more where this came from.”
Do you think that this can’t or won’t happen?
If you’re becoming successful in building your portfolio…
If you’ve turned that block of land into a block of flats…
If you’ve flipped that commercial property and made a tidy profit on it…
If you’ve created a nice, healthy cash flow for yourself and your family…
It would be wise to consider yourself a target for the kinds of lawsuits I’m talking about…
Or others, for that matter.
Get out of the aquarium
It’s like being fish in a glass aquarium where everyone can see everybody else…
You can get eaten by the bigger fish…
But you can get just as eaten by the shark that the smaller fish have hired to eat you.
What’s the solution to this problem?
Get out of the aquarium…
Swim in the safer waters of trusts, corporations and friendly debt.
Yes, I’ve talked about this before…
But I also know that many who are building their portfolio haven’t taken the steps necessary to protect themselves…
They tell themselves that they’ll “take care of it” after they’ve made it.
But when is that, really?
When you’ve replaced the income from your day job?
When you’ve pulled the pin on your day job?
When you’re making more money than you really need to live how you want to live?
I hate to say it, but when you’ve gotten a bit of money ‘round you…
When you’ve built a portfolio of almost any size…
You’re better off thinking that you do have a target on your back…
Or, more accurately, on your wallet.
Thing of it is…
That target will stay there until you take it off yourself.
And the only way to do that is through proper asset protection.
Without it, what you’ve built can be easily taken away…
And, if your asset protection is done the right way…
That target is off your wallet and on to someone else’s.