Someone got me thinking about this and it seems to make sense, at least for risk-tolerant investors in their acquisition phase.
TerryW, could this be a viable asset protection strategy for investors with time on their side? Simply maintaining a high LVR by reborrowing equity (for investment purposes), and having the lender be a barrier between the asset and any creditors/litigation issues etc?
Yes. but that really means you have little to no assets!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Think if it this way, if you were to go bankrupt the banks would take the property securing your debt to them. Any other assets would be up for grabs. But if you don't own anything and have little equity then there will be nothing for creditors to take – this could discourage them from suing you in the first place.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry.
Now this is not something that I do, and I don't condone concealing assets from anyone, but…
I think a great strategy is to hedge highly leveraged real estate investments with physical precious metals, like a moat of liquidity around your empire, completely outside of the financial system.
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