Legal Question in Real Estate Law in Hawaii

Re: Asset Protection

If you are going to own multiple properties there are an infinite number of set ups on a CASE BY CASE BASIS. One example several rental owners use is putting each property in a separate Land Trust, and an LLC (or LP in TX because of tax issues) should be the beneficiary of the land trust. The S-Corp could be a 1% GENERAL PARTNER in the LP, and you should be the Limited Partner. If someone sues the LP, they are suing the corporation the only person who has liability is the GENERAL PARTNER. The limited partners can vote to replace the General Partner AT ANY TIME, so long as they buy out the GP for their share of the LP.

So, as you can see the above example may protect you from liability very effectively but not be TAX WISE. That is why you need to sit down with someone and show them the books on your rentals --value, type, location of your rental properties so that a balance can be struck between TAX WISE and LIABILITY WISE Real Estate protection. Feel Free to give me a call (808) 526-0892 if you need further assistance

Aloha, Jon A. Zahaby