592: BiggerNews April: How to Counter the Biggest Risk of 2022's Real Estate Cycle w/Doug Lodmell

Apr 5, 2022

Doug Lodmell, an expert in asset protection for real estate investors, shares his invaluable strategies for safeguarding wealth in a turbulent market. He reflects on lessons from past crises like the 2007 downturn and emphasizes the importance of robust risk management. Doug discusses innovative structures such as LLCs and limited partnerships to protect investments. With market conditions changing rapidly, he provides practical insights for navigating the current cycle, urging investors to be cautious yet proactive in their approach.

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ANECDOTE

SNL Crisis and Asset Protection

Doug Lodmell's father, an attorney, found success syndicating real estate in the 80s.
During the SNL crisis, charging order protection shielded investors from creditors, sparking his interest in asset protection.

ADVICE

Basic Asset Protection Tools

Use LLCs or LPs as a base layer, separating properties into different entities.
Employ holding companies in states with strong charging order protection like Nevada, Wyoming, or Arizona.

ADVICE

Financing and LLCs

Secure financing personally, then transfer the property into an LLC without informing the bank.
Accept the small risk of triggering the due-on-sale clause; banks rarely notice or enforce it.

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The way the housing market moves largely depends on the real estate cycle we’re currently in. We all saw this during the 2007 subprime mortgage crisis as overleveraged homeowners saw their properties foreclosed on and later sold to investors who had cash on hand. We’re currently experiencing dramatic demand coupled with low inventory, so are we at the end of the housing market cycle, ready for a recession to knock down this house of cards?

Whether we are or aren’t close to a housing bubble bursting, smart real estate investors are protecting their wealth regardless of what is to come. This is where today’s guest, Doug Lodmell, has gleaming insight. Doug and his team have worked for decades to protect the wealth of real estate investors. This is commonly known as asset protection but can be thought of as simple risk mitigation for the new real estate investor.

Doug has been through expansion, crashes, corrections, recoveries, and everything in between and has seen what a poor asset protection strategy can do to an investor's portfolio. He drops some knowledge on today’s show around how real estate investors in 2022 can protect themselves from going through a repeat of 2008. His simple, yet undeniably valuable advice could save you not only money but years worth of work you’ve put into real estate investing.

In This Episode We Cover:

Quick takes on today’s biggest stories surrounding the housing market

The tools asset protection lawyers use to protect and disguise their clients’ wealth

Whether or not new real estate investors need LLCs when buying properties

The biggest mistakes real estate investors make that cost them their wealth

Leveraging debt to build your portfolio vs. cash hoarding for post-crash opportunities

BiggerPockets’ newest podcast show featuring our own Dave Meyer!

And So Much More!

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On the Market Podcast