Using Debt-Shields to Reduce the Exposed Equity of Protectively-Titled Property
Once a property is protectively titled, its exposed equity can be reduced
with debt-shields, as we suggest with the family home. You want to adopt
the same equity reduction strategies you'd use with your home. The
goal is to fully encumber your real estate. You want that profile of 'poverty'
that discourages lawsuits. So that calls for third-party liens against
your investment properties. If you have good credit, you can borrow 70
percent or more of the properties' value from conventional lenders
(banks, finance companies, etc.). With poor credit, or if you otherwise
cannot obtain a conventional loan, 'hard money' lenders will lend
at a steeper finance charge, which may still be preferable to losing your
property in a lawsuit.
Though it's easy to understand the role of
'equity-stripping' in Asset Protection, the problem is implementation. You may not know
how, or where, to find the right lenders. Or you may not know how to 'defensively
position' and mortgage your property. But there are a number of different
ways to structure secured real property loans. As with residential loans,
we arrange loans and debt-shields for even the poorest credit risk property
owners. Our financing arrangements involve third-party guarantees, collateralizing
the loan proceeds with 'back-to-back' loans, loans from international
entities, and so forth. We also routinely encumber property through complex
insurance/financing arrangements which fully encumber our clients'
real estate. Debt-shielding commercial property, however, can be simpler.
Start with banks, finance companies, and conventional asset-based lenders.
Or use an affiliated company as 'your lender' if you own smaller,
less valuable properties.
We've debt-shielded the poorest credit risks from international lenders
to legally and effectively encumber assets and estates worth millions.
Our financing arrangements are generally tax-neutral, and neither saves
nor defers taxes. For example, one car dealer in heavy litigation fully
encumbered his $2 million home, vacation property, and car dealership
valued over $6 million through a complex patchwork of cross-collateralized
loans. Once his assets were fully encumbered, we settled a 20 million
dollar lawsuit against him for only $100,000. Without these mortgages
to shield his equity, the lawsuit would have cost him a fortune.
Equity-stripping is a vital strategy. We can arrange 95 percent loan/value mortgages against any type of asset
– real estate, a business, vehicles, notes receivable, intellectual
property, and so forth. We can fully encumber and creditor proof virtually
every U.S.-based asset. The loan proceeds are back-up collateral secured
through an international trust. And a strong credit rating is unnecessary.
Moreover, interest on the loan is set at about one-half percent, so your
cash-flow impact within the loan term is minimal. This program is likely
your best equity-stripping option if you have $500,000 or more in U.S.-based
real estate or other assets that require protection.