THE CASTLE KEEP ASSET PROTECTION STRATEGIES GARRETT SUTTON
But for today , without the expense and zoning issues of actually building a castle , what is the best way for you to hold real estate ? There are several scenarios for real estate investors with varying asset protection options , so let ’ s look at a new client of mine who uses a few of the different options himself .
Sammy is an astute real estate investor . He had started out as a carpenter working for a company that both built homes and filled in their time with remodeling jobs . He soon realized that the clients who spent $ 10,000 with the company to remodel a property were turning around and making $ 50,000 when they later sold the property .
Sammy liked his job , but even more so , he liked to make money . So he started by buying a rundown property at a discount that he could fix in his spare time . While he experienced a few setbacks and some learning pains , when the remodeling and painting was completed , Sammy had a $ 20,000 profit after the sale .
That was enough to launch Sammy into his new career . Since then , Sammy has been buying distressed properties , fixing them up and selling them . In the last six years , Sammy has also been fixing up duplexes and 4 plexes and keeping them for his own portfolio . To further his real estate options Sammy has also started building spec houses for sale and profit .
Sammy has assembled a good team of professionals . He has learned from his CPA and attorney that each of his three real estate activities – remodeling for quick sales , holding and keeping , and building homes for speculation , or spec home sales – require a different legal strategy and a different means of taking title . His strategy is as follows :
1 . Remodel for quick sales . This is the strategy Sammy had first started with and it continues to constitute a significant portion of his profits . Still , as more new investors are getting into “ fixing and flipping ,” the sale prices for distressed real estate are increasing . Sammy knows what his margins are and won ’ t bid on dilapidated yet overpriced properties as others have done . Nevertheless , there have been plenty of good fixeruppers in his area to acquire .