The breakdown of personal relationships is one of the biggest yet most overlooked threats to real estate investing businesses, so what can you do to protect yours?
Whether you are just in a serious relationship right now, have been married for 40 years or are a blissfully hitched newlywed if things go wrong, they can really ugly, really quick and that can bring down your entire real estate investing company in almost no time at all.
This is a huge threat to investors and seriously underestimated by most. It is essential to be proactive about defending your life?s work, assets and income and if you have business partners you want to ensure they are equally protected too.
Ugly breakups can obviously become a big distraction from productive work and can mean child support and alimony but that is just the tip of the iceberg. If unprotected it can mean giving up a percentage of all of your properties and a slice of your real estate investment business. It can also lead to a negative reputation and a breakdown in your operations which can be equally as damaging.
Do not underestimate the fact that a bad breakup could leave you completely destitute, bankrupt, homeless and with no credit or reputation on which to rebuild.
So what are you doing about it?
Formally incorporating your real estate investing business is a great start. Some will enjoy achieving more anonymity and privacy with exotic corporation structures and holding just a few properties in a variety of different entities. Technically these assets still must be disclosed to the court in a divorce but making them harder to identify upfront may make you less of a target and enable a better agreement to be worked out in advance. Note that this is where staying highly leverage can also be a big advantage.
Still, disruption of operations is often an even bigger threat. If cash flow is stalled real estate investors can go broke fast and the domino affect can bring it all down in no time.
So have liquid reserves in a business account for operating capital, one which your other half doesn?t have access to.
Have an emergency jump kit too which you may want to keep stashed at your office or at least outside of your home. This should include cash and anything else you need to keep working and keep a roof over your head from an extra suit to a standby laptop in case your partner decides to throw yours at your head as they chase you down the driveway.
Real estate investors also need to be prepared to defend their online reputations from angry ex?s too. Those bitter online comments, news blurbs and Facebook posts can do major damage even if they aren?t true. This means a consistent SEO effort on a regular basis to control your online reputation even before you anticipate an issue as well as stockpiling some keyword rich content for these emergencies.
Most importantly of course have a good attorney already picked out (the best around) as soon as you smell something sour.
Source: http://reieducationcompany.com/protect-your-real-estate-business-from-a-breakup/
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