Real Estate LLC: Review of The KISS Guide to Entities & Asset Protection by John Hyre
John Hyre's “KISS Guide to Entities & Asset Protection” promises to teach real estate investors (1) how to select the best real estate LLC or other entity for maximum tax benefits and asset protection and (2) how to set it up themselves.
|Delivers on Promise?|
Specifically for real estate investors
State-specific set up instructions
Not updated since 2003
Would have been better if it had info on maintaining your entity
Not available online or as audio or video
John Hyre’s course “KISS Guide to Entities & Asset Protection” has been around for many years and has been used by hundreds of real estate investors to help them with their entity selection.
In the course, John helps real estate investors determine which entity to choose – both for maximum tax savings and asset protection. He discusses the pros and cons of LLC’s for real estate investing and shows you how to set up a real estate LLC or C-corporation yourself (and in your state). The course is a must-have if you’re a real estate investor interested in setting up an entity for your real estate career.
Here are some of the main points and topics John covers in the course:
- How to avoid personal liability even if you own real estate in an LLC.
- How to maintain the corporate shield. John says that an LLC is like children: they're easy and fun to make, and a lot of work to maintain. 🙂
- What to look out for when hiring contractors to protect you.
- The truth behind Nevada entities.
- How to save on taxes by paying your children (I didn't know this! This tip alone will pay for the course many times over.)
- Selecting and using the right entities to save the most on your taxes.
- Pros and Cons of different entities.
- S-Corps are a great way to save taxes: pay yourself about 40% of profits as salary and you should not have any problems with the IRS. (I didn't learn this until a few years ago. Saves me thousands each year).
- Rentals should be held in LLC and NOT taxed as a corporation (find out why).
- When does a separate management company make sense?
- How to set up an LLC or corporation in your state step-by-step.
- Here's what's in the Document library:
- Articles of Organization
- Operating agreement for real estate investors (short and long version). The longer version contains provisions for members vs. managers, transfer of interests, and capital contributions. Based on what I know about how much attorneys charge for operating agreements, this is worth at least $1,000.
- Application for EINS
- Meeting minutes
Meet the Instructor
John Hyre is a tax attorney, accountant and real estate investor. I’ve known him for a nearly a decade and there are several things I really like about John:
- He’s extremely knowledgeable about tax law and isn’t afraid of the IRS. He specializes in helping people with audits and litigation as it relates to the IRS (trust me, once you hear or see John in action, you’ll want him on your side). Most recently, his passion is educating people about the benefits and pitfalls of investing with their self-directed IRAs.
- He specializes in tax law specifically for the real estate investor, AND he’s a real estate investor himself. I don’t know of a single CPA/tax attorney like that!
And finally, his content is to the point, actionable, and laced with classic John Hyre humor (turning a rather dry topic into a rather entertaining read!). In fact, he’s absolutely hysterical. Listen to my outtakes from one of his recent presentations:
Click here to download a short PDF of an excerpt of the course containing these sections:
- Table of Contents
- Discussion about Asset Protection and the “Basic Liability Shield”
In this day and age I really want instant access to a course that’s online. And I want it in multiple formats (PDF, video and audio). John’s course is only available as a shipped binder.
When you open the package, the course comes in a simple white binder with a cover that appears to have been printed at home. Because it comes in a binder, sometimes the pages come out of the binding. The course comes with a CD that contains the document library (but the CD was mis-labeled with John's bookkeeping course).
By his own admission, John doesn’t really care about appearances, but he DOES care about the content – both of which are apparent when you hear him speak or see the course.
Overall, nothing fancy but professional – the first impression is fine for a shipped product.
- The course has not been updated since it came out in 2002. This is distracting when John makes references to events that happened a long time ago. Based on my own experience and conversation with John, the material is still relevant and accurate (though with everything, make sure you consult your own attorney!). Nevertheless, John could put out another revision!
- Well-organized and easy to understand: The content is organized well, table of contents, page numbers, easy to find stuff. The language used is easy to understand, and I can follow what John is saying.
- The course’s almost exclusive focus on real estate investing makes this the best course on the planet on the topic of entity selection and setting up your entity for real estate investors.
- The Document library is excellent, especially the sample operating agreements. BUT: there is no separate explanation of the longer version which would be useful.
- State-Specific set-up instructions: John provides specific set-up instructions for AL, AZ, CA, CO, FL, GA, IL, LA, MD, MI, MO, MS, NC, NJ, NV, OH, OK, TN, TX, VA, WA.
Delivers on Promise?
John’s promise is to help you decide which entity to use for your particular real estate investing strategy. He delivers on that.
If you’re in one of 20 states John provides the course for, then he also promises you to set up the LLC or C-Corp in your state. (If you’re not in one of these states, I would rate this section as a D because at least half the value of the course is how to set up the entity yourself).
I wish there was more info on maintaining your entity. While he doesn’t promise you to help you maintain your entity, he should have included it. I suggest purchasing the NOLO Book “Your Limited Liability Company” on Amazon for around $30. It has all the best practices, forms, and checklists that you need to make sure you are playing by the book. I suggest buying this course and this book together so that you have everything you need.
Whenever I buy a course I want to get at least 10x the value out of it. Does this one deliver?
From experience, I know that an attorney will charge $700 – $1000 to set up an LLC and put in place a moderately complex operating agreement. You can do that yourself with this course, though I suggest you have your attorney review your operating agreement (and instruct him not to spend more than an hour doing so!).
If you add tips like the S-Corp election and hiring your children – those two combined will result in many thousands of dollars in tax savings.
Shouldn’t your CPA tell you about these strategies to save taxes? Yes – he should. But without the knowledge I got from this course, I would have never known it was time to find another tax advisor.
In conclusion, the course delivers the value that I was looking for when I got it.
John Hyre’s course “KISS Guide to Entities & Asset Protection” is a bit simple and outdated but it makes up for it in the completeness of real estate LLC/entity selection and set-up. If you're a real estate investor who wants to set up an entity, then get this course because it'll save you money and get you started faster. Then get the NOLO Book “Your Limited Liability Company” on Amazon to help you maintain the LLC.
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Disclosure: Please note that I will earn a commission if you decide to make a purchase (at no additional cost to you). I am recommending this product because I think it may be helpful and useful, not because of the small commissions I make if you decide to buy something. Please do not spend any money on this products unless you feel it will help you achieve your goals.