Jonathan Feniak  0:00  

With a strong LLC, we’re trying to prevent a piercing of the veil. So So can a creditor of your LLC get to you as an individual, there’s a lot of talk about piercing the veil, where where they go after the individual owner. Those are actually quite rare in the courts that a judge allows that to happen, there are some things that you can do to prevent it from happening. And I like to say that if you treat your entity with respect, a judge is more likely to treat it with respect as well and actually deliver on the promise of limit limited liability protection. 

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J Darrin Gross  0:55  

Welcome Commercial Real Estate Pro Networks, Welcome to CRE PN Radio.  Thanks for joining us. My name is J. Darrin Gross. This is the podcast focused on commercial real estate investment and risk management strategies. Weekly, we have conversations with commercial real estate investors and professionals who provide their experience and insight to help you grow your real estate portfolio. 

Today, my guest is Jonathan Feniak. Jonathan is an attorney and partner at Colorado LLC attorney.com. In his position, he helps business owners at nearly every level in nearly every industry with asset protection, estate planning and business formation. And in just a few minutes, we’re going to speak with Jonathan about asset protection, and how to keep your assets. But first, a quick reminder, if you like our show, CRE PN Radio, there are a couple things you can do to help us out. You can like, share and subscribe. And as always, we encourage you to leave a comment, we’d love to hear from our listeners. Also, if you want to see how handsome our guests are, be sure to check out our YouTube channel. And you can find us on youtube at commercial real estate pro network. And while you’re there, please subscribe. And with that, I want to welcome my guest, Jonathan, welcome to CRE PN Radio.

Unknown Speaker  2:23  

Thank you for having me. I’m really excited to talk to you today.

J Darrin Gross  2:26  

I’m looking forward to our conversation as well. Before we get started, if you could take just a minute and share with listeners a little bit about your background.

Jonathan Feniak  2:37  

Yeah, so being an attorney is actually my third career graduated law school in at the end of 2019. And was admitted to the practice in Colorado in early 2020. Currently applied for admission to Wyoming bar. And Tom, I think with COVID is pretty slow. It’s about a six month process to for the admission. Before that I was a financial advisor with Wells Fargo advisors worked for a number of different hedge funds as well. Focusing on short duration, credit, asset backed lending, manage relationships, and all those roles with high net worth individuals. Many of them were real estate investors. And before that I was an operations in Manhattan managing very significant operations for DHL and everyone Express so 10s of 1000s if not hundreds of 1000s of packages a day and hundreds of employees. And so I sort of understand the different ways that people grow their wealth, make their money, manage that wealth from operating companies to more passive real estate investments to hedge funds to stocks, bonds, mutual funds, insurance, I was insurance license, I mean, the broad spectrum, and now sort of the capstone of all that experience is assisting individuals from the legal perspective, once you’ve made the money, how are you protecting?

J Darrin Gross  4:06  

That’s awesome. I love the experience from elsewhere. And how that changes your perspective. You know, in your your, your current profession as an attorney I I think too often, you know, people are kind of isolated in their their profession without any actual practical, you know, operation or having that that sense that it clearly I know even just as myself being an insurance broker but also being a real estate investor just you know that your your viewpoint changes because when you when you operate, you do have a unique perspective from within as opposed to outside so that I that’s awesome. And have you have you found that to be the case? I guess I should have asked you the question. Have you found that to help you with with your perspective?

Jonathan Feniak  4:56  

Absolutely. And and one of the things that I bring to my Clients is the business aspects of the law there? Are there are business decisions to be made, how much protection Do you need often comes down to what the maximum amount of protection will cost, there is a cost factor. And so depending on your assets, depending on your risks, there’s that that business decision and business judgment to be made. Do you need the, you know, $50,000 a year plan in terms of asset protection? Or does it make more sense to sort of scaling your asset protection over time as your risks grow? And as your assets grow? that’s that that’s what we recommend and and not overdoing it early on, when it’s really not necessary?

J Darrin Gross  5:46  

No, that’s, that’s so good. So let’s kind of back up here one step and maybe start with what are we trying to protect our assets from?

Jonathan Feniak  6:00  

There’s two kinds of risks that individuals are most frequently faced with and one is going to be risk that flows from the operating business or from the ownership of the real estate. How do we protect against those kinds of risks, and then the other kind of risk is risk that flows from them walking around in the world, you know, driving their vehicle getting in an accident. Someone, you know, bringing a negligence claim against you for something you did as an individual. And how can you protect your assets in both of those, when there’s those two types of attacks, when it comes to protecting your business as insurance always winds up being the first choice, they wanted to being the easiest choice. Hire an insurance agent, a really good insurance agent, who helps you identify the risks and get the proper amount of coverage for the correct risks are the risks that you will actually face, then you start getting to separating yourself from the liability. So you as an individual separating you from liability, limited liability companies, setting one up in in your home state or the state where the property is located, is typically the first step. And then looking for additional protections, more protective, limited liability company laws, there is a most states have adopted some form of the uniform Limited Liability Company Act. But there are differences, which states will sort of put their own bent on it. And some states are more protective of the owners of limited liability company than others. Wyoming is the state where we’re many individuals will set up a holding company, they also do it with Nevada, or Delaware. Those are jurisdictions that are very protective of limited liability company, the owners of limited liability companies and not allowing a piercing of the veil event. So sort of set up that that structure insurance as the first protector of the business asset. If that fails, creating a strong structure with your limited liability company so that the there’s not any cross liability issues, the liability doesn’t escape the shield you’ve created. Another common recommendation that we make is something called equity stripping. And many individuals want to have their properties paid off the properties inside that limited liability company paid off. But what they fail to realize is that the equity value of those properties would be subject to the claims of creditors. If you are if the limited liability company shield holds, and the creditor is not able to get to you personally, that’s great. But if you’ve got a million dollar piece of property that’s paid off, that million dollar piece of property would be subject to the claim of that creditor if they go beyond your liability insurance. And so understanding that while paying off a piece of property is a goal. using tools like cash out refinancings, to minimize the amount of equity that would be available to creditors is a great tool. And you can also if you don’t like the idea of having loans outstanding to banks, you can set up your own lending entity to make loans to the property owning entities. And in that way you strip out the equity do a cash out refinance with a related entity. Now there’s some pitfalls to that. It needs to be bonafide. I’ve read a lot about you know, friendly liens and heard attorneys recommending friendly liens. Are you familiar with friendly liens?

J Darrin Gross  9:40  

I’m not.

Jonathan Feniak  9:41  

Alright, so a friendly lien is the idea that, you know, just file a mortgage on your property with a related entity but don’t actually funded, you know, just filed a mortgage and then that’s going to stop a creditor in their tracks. I think that’s foolhardy if there’s not a bonafide A contract or a loan that was put in place related to that mortgage, it’s most likely going to be disregarded by a judge who’s trying to enforce a lien of a creditor, you need to basically prove up that loan. But by taking steps, you can create a bonafide transaction between two entities your lending entity, and your property owning entity, you get a promissory note. There’s there’s documentation of the loan, there’s a mortgage, so there’s security for the loan, there’s a payment schedule, appropriate interest is charged, payments are actually made. If the borrower IE your property owning entity doesn’t make payments, then default can be called by your lending entity. And in this way, you can have very little equity in that property owning LLC, that will be subject to the claims of creditors. So So those are some of the steps we take when we’re we’ve got liability that’s coming in through the property itself. But then there’s liability that comes from just me walking around on the world, and how do we protect the assets from claims of our personal creditors?

J Darrin Gross  11:15  

So yeah, do tell, I love to ask you a little bit more on the equity stripping, but if you want to run with this, so the equity stripping thing I get, if you’ve, you know, got a loan, and it sounds like what I’m hearing you say, is this, this friendly lien kind of thing where you actually you set up a an actual lending vehicle, I mean, an actual structure too. Soon, that’d be like, do that as a separate LLC? Correct?

Jonathan Feniak  11:42  

Correct. Yeah, do a have have an LLC, or a number of LLC, which own properties. If you want to pay cash for the properties, great, I’m glad you have the cash available. But I would not recommend having a wholly owned piece of property, you know, no debt on it in a limited liability company. Because again, the problem is that if someone Sue’s and they’re successful, they get a judgment that goes above the liability insurance limit, all the value of the equity will be available to that creditor, so instead, you’re going to purchase the piece of property with cash, okay, great. The cash will come from your lending arm of your of your empire. And the loan will come in to the Limited Liability Company, which is going to purchase the property files a mortgage, there’s a promissory note. And now there’s a mortgage on the piece of property, which if a creditor Sue’s there, they’re going to be left with just the insurance value or you know, trying to defeat this loan and say that it wasn’t a bonafide loan. And so those, those sort of those hallmarks of a bona fide loans and the things I just talked about, but but in that way, this, this lending entity, doesn’t have any liability, Wells Fargo doesn’t have liability if someone slips and falls in front of your rental property, right? They’re just the lender, right? So so all that’s going to be available to that, to that judgment creditor is going to be whatever sort of equity value there is in the property, which you’re going to minimize. Another thing is I hear, you know, individuals, they’ve got an LLC and the, you know, perhaps the property is, is, is cash flowing positive. And they keep that cash flow inside the accounts of the limited liability company, right, they let it build up there. So I got 50,000 in income that I’ve made off of my real estate, instead of distributing out the cash. And the reality is with an LLC, you’re paying taxes on the income whether you distributed or not. So why subjected to the claims of creditors? Now you got to have operating capital in your LLC. But what is what is an appropriate amount of operating capital? You know, we sort of saw in the beginning of the pandemic, there were companies airlines, three months, they were filing for bankruptcy. Alright, so it’s three months of operating capital is is a good number for maintaining that amount of cash in your operating accounts for your LLC, not five years worth of capital or multiple years worth of capital.

J Darrin Gross  14:18  

Right, right. Right. No, I mean, yeah, definitely. You need to have some operating capital because there’s there’s always going to be somebody with a bill or something that needs to be paid. So you don’t want to be without that. Well, that’s interesting. I just I hadn’t heard that I mean, it it makes complete sense if you you know, have a a an entity or vehicle that is a lender and there’s a lien on there. And then that I’m assuming that would dissuade any would be, you know, claimant, when they realize that there’s no equity or very little equity, as opposed to it’s eight off there’s no no lien against the property. You know, as far as what the potential for payout is, and like you said, even what goes through the courts if the once the insurance is paid out in full, and then the judge starts looking for what else? What else have you got? Right? What else with that with the, the lending? I mean, because obviously, I’m assuming you would be the the member owner of the or somehow you’d be connected to the lending arm, would that not be recognized as an asset to the to that or is that? Would that trickle down to your, your balance sheet where they recognize that that’s a an asset? And they want that?

Jonathan Feniak  15:42  

Yeah, well, it’s not going to be an it’s not an asset of the LLC, which owns the property, right. So we’re sort of right, with a strong LLC, we’re trying to prevent a piercing of the veil. So can a creditor of your LLC get to you as an individual, there’s a lot of talk about piercing the veil, where where they go after the individual owner, those are actually quite rare in the courts that a judge allows that to happen, there are some things that you can do to prevent it from happening. And I like to say that if you treat your entity with respect, a judge is more likely to treat it with respect as well and actually deliver on the promise of limit limited liability protection. So do you have a bank account for your LLC, you know, that collects the rents that pays the expenses, then distributes the remainder out to the owners? Are you is your entity up to date on this filings so you’re doing your direct reports, it’s in good standing with the state in which the LLC is located? Do you have good books and records are you showing that this is not just treated as your alter ego, or your left pocket or your right pocket. So you’ve got good good records, you know, not just your bank accounts, but you know, you’ve got a bookkeeper, or you’re keeping the record yourself and you can deliver those to accordance A this is separate and distinct for me. And I paid the fees to the state to get limited liability protection. And I should be, you know, that should be delivered to me. Some states are more likely to or judges are more likely to allow a piercing of the veil to get to you. Other states are more protective of it. And when individuals have multiple properties in multiple states with potentially judges, which are going to be more sympathetic to the claims of judgment creditors to allow them to get to your personal assets. In that case, we recommend and typically you got two or three LLCs in a particular state, then you set up a holding company, and the holding company should be in a very protective state like Wyoming. Wyoming has very strong Limited Liability Company laws. And what that does is it creates another hurdle for a potential creditor to have to jump through to get to you. So not only will they have to pierce the property owning LLC, they don’t get right to you, they’re now going to get into a Wyoming LLC and the Wyoming LLC is going to be very protective of not letting another piercing to come to you and get to your you know, your savings account and your primary residents.

J Darrin Gross  18:20  

Got it? Got it. Not I appreciate you sharing with you know that I mean, just the whole nature of the structure in what the elements are that the judge would look at as far as whether or not you you know, the or to pierce or your What do you allow the the piercing of your, your entity? I wanted to ask you So you mentioned the the bank accounts. And the fact that you you’re in good standing with the state with your entity selection, and you’ve, you know, filed and paid your fees, and that I’ve heard mentioned about like, you know, meeting minutes and records and that kind of thing. Is there a hierarchy or a or a list of things where, you know, you could say, well, you’re doing these things, but this maybe wasn’t done. I mean, I I’m just thinking, you know, personally with definitely banking accounts and all that the record keeping is all separate and stuff, but perhaps that the mean minutes and all that stuff or maybe not, is as well documented as perhaps a, you know, a board meeting, you know, a fortune 500 company?

Jonathan Feniak  19:32  

Yeah, I don’t think you need to have the same type of records as a fortune 500 company. You’re you’re building a story that you may never be called on to tell. But if you get in front of a judge and the plaintiff’s attorney is making the case that you should be held personally liable. What do you have that you can show to convince a judge that this is a real business? The more you have, I think the better off you are But as we talked about earlier, there is a, you know, there’s this hierarchy, and there’s there’s business realities. And then there are what is sort of your perfect world? And, you know, on an on an annual basis, I think you have an annual meeting minutes. And you talk about Okay, well, the company did this, put in some financials about what happened, make it a part of your your plan for things like tax prep. And so how much are you distributing out to the members, you know, the members evaluated or the single member, you know, evaluated the business, we made these decisions about what we’re going to do going forward for the the upcoming year, and we’ve destroyed decided to keep this much in operating capital to cover all of our expenses. And we’re distributing this out this much out to the members as a member distribution, boom, great. That that will be, you know, if you’ve got a multi million dollar Empire, I would have more I’d have quarterly meetings or monthly meetings, or anytime you’re doing something, you’re making notes on an ongoing basis, because that’s the story, you’re going to have to tell the judge. And any toehold you give a plaintiff’s attorney, they’re gonna look to exploit, you know that one time you paid for your your child care out of your LLC, could wind up being the toehold that a plaintiff’s attorney uses against you this is really just your alter ego, his or her alter ego, and therefore should not be treated with respect of a limited liability company. So don’t do that. It’s very, it’s easy enough to distribute the money out to yourself to then pay for the childcare, not make the payment directly out of the limited liability camp bank account, limited liability bank account, I think is going to be one of the strongest and best pieces of evidence you can you can put before judge

J Darrin Gross  21:50  

Got it? Got it. So we’ve talked a little bit about the operations. You know, how you operate and kind of the the structure. You mentioned insurance and LLCs and a little bit of the equity stripping possibility and then just kind of the, you know, what, what a judge would look at when, when they’re determining whether or not the veil can be pierced. You started talk a little bit about personal. Can you talk a little bit more about some of the things we can do personally, to protect ourselves?

Unknown Speaker  22:29  

Sure. Oh,

Jonathan Feniak  22:32  

yeah.  So if I have personal liability above my insurance policies, that plaintiff’s attorney is going to add at the end of the case, when they get the judgment, they’re going to ask me to tell them what the my assets are. And there’s certain places you can put assets where they’re going to be be granted greater protection by the courts than than others. If it’s in my personal checking and savings account. It’s going to be available to the claims of those creditors. If it’s in a 401k or IRA, there’s there’s definitely enhanced protections for those retirement accounts. If it is in a certain insurance products, it’s going to be protected from the claims of creditors like a whole life policy or an annuity. The homestead exemption, most states do have a homestead exemption, some states are more generous than others, with some being zero homestead exemption from the claims of creditors and others being you know, we’ve heard of Florida, there’s unlimited effectively, in most cases, there’s going to be unlimited homestead exemption. So those are are places where you can have protection for your assets from the claims of your personal creditors. Another thing though, is a limited liability company, depending on the state. So some states will allow a creditor to effectively foreclose on your interest your membership interest in your limited liability company, it’s even more likely to happen with a single member LLC. They can also allow a creditor to sort of break into the LLC and foreclose on the assets there. But there’s certain states Wyoming being one of them, that has the sole remedy of a creditor is called charging order protection. And for many of our clients, they set up a Wyoming LLC as the holding company, and then subsidiary LLC in Colorado or Nevada, or, you know, Louisiana or wherever else. But to get to those subsidiaries. All roads go through Wyoming. And what a charging order charging order protection does, it’s it’s built into the statute in Wyoming. And it says that the sole remedy of a creditor is a charging order on the LLC. And so what that means is The creditor can sit on the outside of the LLC and wait for distributions to be made. But they can’t break into the LLC and start mucking around and taking assets or selling assets or taking control of the LLC. Other states charging order is one of the remedies available to a creditor or another will be foreclosure on the interest in the in the limited liability company, you know, putting liens on the assets in there. And and so for for individuals who are concerned about their personal liability having an impact on their business assets. A Wyoming holding company is a great tool to prevent that liability from flowing down and affecting what you built in your real estate Empire.

J Darrin Gross  25:43  

Got it? And that that whole the having it based in Wyoming are one of the more advantageous states to be filed in. How does the courts view that if I own property in the Florida, I have Wyoming LLC is the holding company, single member entity of the Florida LLC Florida property, and I live in Oregon. Is there is or is it in the the event is the property that’s affected? The policy that’s affected? is in Florida. Is that is that pretty much gonna stop at the Florida property and the LLC? Or is there? Or is there anything that that? You know, is that is that pretty much the way it is? I mean, you know, if I’m hearing right, that’s kind of the idea is you create the the holding company in these, these more fortress, like states that are more protective, and that that’d be the end. And so you basically are stopping pedal liability at that, at that state that that entity is it. That’s that’s basically the simple the floss there.

Jonathan Feniak  26:59  

It is. And and and judges are supposed to respect the choices of the members of limited liability company that they’ve chosen to form their entity in in Wyoming. Nothing is bulletproof. But I want as many protections as I can get. And it’s another it’s another argument to make in a court before a judge, you know, did you respect the the Wyoming entity? So is there a flow of capital from your subsidiaries after they pay all their expenses and collect all their rents, and they flow it up to the Wyoming entity and the Wyoming County has good books and records? It has its own bank account, so on and so forth? And then distributions are made? So did you show that entity respect? Why did you choose Wyoming? Because it’s very protective of my assets? That’s why I specifically chose it? Is it going to be you know, 100%, that a judge is going to respect that? No, no, you can always have judges who who sort of do things which because there’s a very sympathetic plaintiff in some respect, or you’ve done something wrong, you’re not liked by by the judge. But would you rather have another possible defense? Or just say, Well, you know, it may fail and one out of 100 times, and therefore I’m not going to do it, you know, that that’s a decision. That’s that business decision that people make? And I totally understand, but I want to have as many hurdles as I can put in place. If I’m faced with one of these, you know, we call credit events with our judgment creditor or or or a collapse in the economy or something else, what can you do to make it difficult for others, to get to the pot of gold, we want to keep away from the pot of gold set up as many hurdles as possible. So, in most cases, if you think about how a plaintiff’s attorney works, a plaintiff’s attorney is going to be working on a contingency fee basis. And if they look at the structure you’ve set up and they sort of do the numbers in their head boy, I’m gonna have to fight now that to assert that this loan is not bonafide that the equity stripping they did, boy, I’m gonna need to fight for a veil piercing event here. And then if I pierce the veil, I need to fight again in Wyoming. And then I need to fight again to do a Pierce the Veil there to get to the individual or it’s an individual plaintiffs. And they say, show us your assets, you’re like, well, the assets are in Wyoming. That’s all I hold is an interest there, then are they going to take the time and the money and the energy to get there or this is what happens? The overwhelming majority of cases is that you’re just in a great negotiating position when it comes time to negotiating the settlement. say, Look, I’m not judgment proof, you can go get a judgment against me, but it’s going to be tough to collect a plaintiff’s attorney. Let’s come to the table here. You’re looking for a million above my policy limit. You know, we’re willing to stroke a check for 25,000. Okay, if you want to roll the dice on going after my app, sits in the structure I’ve set up, that’s up to you. But we’re not going to roll over, it’s not going to be as easy as attaching my bank account and just pulling the cash out of there, there are going to be, there’s going to be a lot more for you to do here. That’s what we want to set up that sort of dynamic where you’ve got the power, you’ve got the tools, you’re in a great negotiating position.

J Darrin Gross  30:20  

Now I like the way you set that up there the just kind of a leverage, as opposed to kind of a straight path. That’s great. You know, when we first started talking, maybe this is before we started recording, he talked a little bit about, you know, when or who needs to do this? Can you speak a little bit to, to that? I mean, we’ve talked about these different structures and stuff, but is there a recognized time? Or when someone should consider or who should consider, you know, more of a, an elaborate structure?

Jonathan Feniak  30:58  

So it’s a business decision. And how much risk do you have? I mean, I have clients, you know, they have four condos. In a well maintained building, it’s a, you know, 20 storey building, and they own four condos there that they run out on Airbnb, and why does it make sense to have each of those condos in its own LLC, there’s a business decision to be made there. How much risk do you actually have, how much equity do you have in the properties, maybe they were low cost, they were 125, grand or 150 grand, and you have you know, $25,000 of equity, and each of them not a lot of equity. Not a lot of liability. Because it’s a condo, the common areas are not your responsibility, that’s going to be the building owner. And then within your unit, there’s really not a lot that goes on there are you know, complex mechanicals are things that can really go wrong or explode or water heaters or, you know, gas lines or any of those things. So there’s very little liability in that unit itself. And so for those individuals, if they want to put four condos in one LLC, with good insurance, sure that that can make sense, right? Now if you’ve got, you know, multi unit dwellings multi unit, commercial real estate, I think each of those with with significant equity in them, and a pool or a hot tub, or balconies, you know, these sorts of things where someone can get hurt seriously, then at that point, I’m saying all right, LLC for each of these properties, with a equity stripping, take that step to do it to minimize the amount of equity that’s there go to the holding company structure to provide additional protection. But but it’s a it’s a thoughtful approach. And we assist our clients with figuring out what is the proper amount of protection, you know, there’s always going to be these sort of outlier events. But you can spend all the cash flow from the business on guarding against these outlier events, you event you have insurance for that. And then you know, what else makes sense monetarily to you,

J Darrin Gross  33:05  

and your partner’s, makes a lot of times. Hey, Jonathan, if we could like to shift gears here for a second. By day, I’m an insurance broker, and work with my clients to assess risk and determine what to do with the risk. And there’s three strategies we typically consider, we first look to see if we can avoid the risk. When that’s not an option, we look to see if there’s a way we can minimize the risk. And when we realize we can’t avoid nor minimize the risk, we look to see if we can transfer the risk. And that’s what an insurance policy is. Risk transfer vehicle. And I like to ask my guests if they can look at their own situation, whether it be their clients, investors, tenants, the market, etc. But if they can identify what they consider to be the biggest risk, and again, for for clarity sake, I’m not necessarily looking for an insurance related answer. But if you’re willing, I’d like to ask you, Jonathan Feniak, what is the biggest risk?

Jonathan Feniak  34:15  

I think the biggest risk is failing to budget for asset protection. When you are an owner of commercial real estate, you know the numbers you know how much it’s going to cost you for your your garden or how much it’s going to cost you if you’re if you’re including the heat, how much it’s going to cost you and to budget for all of these things to figure out what the cash flow is going to be on on the business and I think you need to budget for asset protection. And as your empire grows, as you’re making more money from your investments, your asset protection should grow. Increasing your policy limits to more than the minimums. Having a, you know, an auto policy with the minimums that are allowed by state law, I think is insanity. How are you maxing out on insurance in some areas and there’s a lot of my clients are maxing out on insurance on the most they can get, right? It’s $1,000,000.02 million or $3 million policy with a million dollars max per claim, how can you get more insurance? How can you protect yourself, limit your downside, and say, this is a this is an expense of running this business empire, it’s it’s incredibly important to re evaluate that just like you’re going in reevaluating your service providers to reevaluate an ongoing basis, you talk to your insurance agent, what more can I do? If you’re maxing out there? And then you start thinking about what structures can I put in place to protect my assets in the event of one of these credit events or, you know, catastrophe striking, and it’s gonna cost you money, there’s a business decision to be made there. But continuing to to increase over your protections, revise your structure so that you add in more protections. I think that’s the biggest risk that people have is they’re not properly budgeting for asset protection and risk management.

J Darrin Gross  36:14  

No, I it’s it’s so true. I think, you know, a lot of times, especially newer investors, I see they basically look to cover the, the mortgage, and some taxes and insurance, but there’s, but yeah, I mean, it’s just the understanding those those operational costs and budgeting for them. That’s, that’s really good advice. I appreciate that. JOHN, where can listeners go if they would like to learn more connect with you?

Jonathan Feniak  36:42  

Yeah. So we, we work through search cloud peak law. At the top level of our firm, it’s law firm, based in chariton, Wyoming, my partner there is Mark Pierce. He is a an absolute absolute guru when it comes to trust and other business structures. And he and I work through Colorado, LLC, attorney.com, and Wyoming LLC attorney.com. So individuals can go to our website, we do entity formation. So we did in December, across all of our firms, we did over 600 entity formations, so forming LLC is forming corporations in Wyoming and Colorado, we also do formations in Florida, Delaware, New Mexico. Reach out to us there for your entity formation needs. And one of the things that we do in all of those venues is and I didn’t touch on this, but privacy is incredibly important. If you own multiple properties, can someone go to the Secretary of State website and see that you own all of these properties that makes you more of a target, they know you have, you know, deep pockets, your deep pocket defended. And so by setting up LLCs through through us, we act as the organizer, your name does not go into the Secretary of State records, we will do your filings for you, and then keep your name out of the Secretary of State records. So someone would have to do a lot of digging to figure out that you’re connected to all of these these different entities but but through our websites is the is the best approach. You can book time with me, you can book time with Mark your book time with other professionals to assist you with your your legal needs that sort of flow out of the entity formation that that really is the start for most of our clients of how they’re getting into our first thinking about asset protection. Other than insurance, almost everyone understands they need insurance, but then they start thinking about, okay, limited liability companies holding company, other structures, other things I can do.

J Darrin Gross  38:52  

No, I I have learned and seen hit practice the you know, the better you plan upfront for how to, you know, structure structure, the the risk, the entity that how the business is going to run. When, you know, when the crap hits the fan, it’s it’s nice to have it all structured properly. So it can you know, it can work efficiently and effectively as opposed to some sort of, you know, a fire drill kind of thing. So

Jonathan Feniak  39:25  

you absolutely have to be proactive, these are not reactive structures. And and we get a lot of calls. You know, this happened, what can I do? Nothing.  It’s too late. It’s too late.

You know, you needed to, you know, there’s that saying, you know, the best time to plant a tree was 20 years ago. And then the second best time is is today. And so if you haven’t if you haven’t done these things, if you haven’t gotten the insurance, if you haven’t built the structures or at least talked about it, do it today, before something happens,

J Darrin Gross  39:54  

Right. No, well said. Well, Jonathan, want to say thanks for taking the time today. enjoyed our talk, learned a lot and look forward to doing it again soon.

Jonathan Feniak  40:08  

Well, thank you very much. I appreciate you being here. And you’ve been a very gracious host. Thank you.

J Darrin Gross  40:13  

All right.  For our listeners. If you liked this episode, don’t forget to like, share and subscribe. Remember, the more you know, the more you grow? That’s all we’ve got this week. Until next time, thanks for listening to commercial real estate pro networks. cr e pn radio.

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