The Importance of Asset Protection and Real Estate Investing with Scott Royal Smith
By Floyd Saunders, Funder of Really Simple Investing
The Importance of Asset Protection
In this episode of the Really Simple Investing Podcast, we have Scott Royal Smith, a real estate investor and asset protection attorney, joining us to discuss the importance of asset protection and his experience in the legal and real estate fields. Scott shares his journey from being an attorney to becoming a successful investor, and how he helps clients protect their assets through his company, Royal Legal Solutions.
Disclosure: This is not legal advice. Retain a attorney before you take an action.
The Importance of Asset Protection
From proper estate planning to protection from liability, legal judgements and the limits of insurance you are likely to need to have some form of asset protection.
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The Journey from Attorney to Investor
Scott's journey into law was driven by a desire to be an attorney and the influence of popular TV shows like "Suits." However, his real estate investing career began when he bought a transmission and auto repair company commercial building for back taxes. This experience sparked his interest in real estate and business, and he eventually flipped the company and the building to pay off his law school debts.
As an attorney, Scott specialized in suing insurance companies on behalf of clients who were denied coverage. This experience made him realize the importance of asset protection and the need to safeguard one's wealth from potential lawsuits. He started investing in real estate while practicing law and eventually transitioned to full-time investing when he realized it was more profitable.
"Asset protection is not just about real estate; it's about protecting all your assets, including partnerships, brokerage accounts, and cash." – Scott Royal Smith
The Evolution of Real Estate Investing
Scott initially focused on commercial properties and one to four-unit residential properties. He found that one to four-unit properties provided stable cash flow and lower vacancy rates compared to larger commercial properties. This allowed him to generate consistent income and achieve financial freedom, which was his ultimate goal.
However, as his investing career progressed, Scott expanded into syndication investments, such as oil and gas offerings, storage units, and gas stations. These investments offered higher cash returns, bonus depreciation, and diversification across different asset classes. By partnering with experienced operators, Scott was able to leverage their expertise and achieve better returns without the need for hands-on management.
"The more people that come into my deal, the more people I have to deal with." – Scott Royal Smith
One really simple way to invest in commercial real estate or even single family home is with a company like Fundrise. or with a Real Estate Investment Trust (REIT)
The Importance of Syndication and Choosing the Right Operators
Syndication investments involve pooling funds from multiple investors to acquire larger assets. Scott emphasizes the importance of choosing the right operators when investing in syndications. He looks for operators with a long track record, experience in multiple market cycles, and a proven ability to attract investors. By betting on the jockey, rather than trying to be an expert in every asset class, Scott maximizes his chances of success and minimizes his involvement in day-to-day management.
"Good deals don't need to be chased; good deals and good operators typically don't have trouble attracting money." – Scott Royal Smith
While Scott primarily invests in syndications outside of his local area, he acknowledges the value of local investment clubs and networks. These connections allow him to meet like-minded investors and operators who share his investment philosophy and can provide valuable insights into local markets.
The Impending Market Cycle and Opportunities for Investors
Scott believes that a market correction is on the horizon, given the current economic climate and rising interest rates. While he cannot predict the exact timing or the specific asset class that will be affected, he advises investors to be patient and cautious.
"You're much better off being patient; not having money invested is okay." – Scott Royal Smith
He suggests that the best time to invest is when everyone else is scared and believes it is the worst ti
me to invest. By taking a contrarian approach, investors can capitalize on opportunities that arise during market downturns.
The Importance of Asset Protection for Investors
Asset protection is a crucial aspect of wealth preservation and risk management. Scott's personal experience and witnessing a friend lose $3 million in a lawsuit highlighted the need for comprehensive asset protection strategies. He advises investors to consider holding their assets in trusts or LLCs to shield them from potential lawsuits.
"If you own stuff in your personal name, it can get taken from you easily." – Scott Royal Smith
By compartmentalizing assets and using proper legal structures, investors can protect their wealth and minimize the risk of losing everything in a lawsuit.
Scott also emphasizes the importance of insurance as the first line of defense. While insurance provides partial protection, it may not cover all scenarios or fully safeguard an investor's assets.
"Every asset should be isolated for liability purposes." – Scott Royal Smith
Therefore, combining insurance with asset protection strategies ensures comprehensive coverage and peace of mind.
Estate Planning and Passing on Wealth
In addition to asset protection, Scott emphasizes the importance of estate planning. By using living trusts and proper estate planning strategies, investors can ensure a smooth transfer of assets to their heirs while maintaining anonymity and avoiding probate court.
“The passing of wealth to future generations involves proper estate planning, including living trusts and educating heirs on managing wealth." – Scott Royal Smith
This holistic approach to wealth management allows investors to pass on their wealth to future generations and provide them with the necessary tools and education to manage their inheritance effectively.
The Role of Royal Legal Solutions
Scott's company, Royal Legal Solutions, provides a comprehensive suite of services to help investors protect their assets and navigate the complexities of real estate investing. Their team of experts specializes in asset protection, estate planning, tax strategies, and insurance. By offering tailored solutions based on each client's unique needs, Royal Legal Solutions ensures that investors have the necessary tools and support to safeguard their wealth and achieve their financial goals.
Conclusion and Future Outlook
In conclusion, asset protection is a critical aspect of real estate investing and wealth preservation. Scott Royal Smith's journey from attorney to investor highlights the importance of understanding the legal and financial aspects of investing. By choosing the right operators, diversifying investments, and implementing comprehensive asset protection strategies, investors can mitigate risks and maximize their chances of success.
As the market cycle evolves and economic conditions change, investors must remain vigilant and adapt their strategies accordingly. Scott's insights and expertise provide valuable guidance for investors looking to protect their assets, pass on their wealth, and achieve long-term financial security.
The future outlook for asset protection and real estate investing remains promising, with opportunities arising from market corrections and the ability to leverage the expertise of experienced operators.
"Asset protection is not just about real estate; it's about protecting all your assets, including partnerships, brokerage accounts, and cash." – Scott Royal Smith
By staying informed, seeking professional advice, and implementing sound investment and asset protection strategies, investors can navigate the ever-changing landscape of real estate investing and build a secure financial future.
To learn more about asset protection, estate planning, and real estate investing, visit Royal Legal Solutions' website at royallegalsolutions.com. You can also find a wealth of information and client testimonials on their YouTube channel.
Remember, investing is a journey, and with the right knowledge and guidance, you can build a solid foundation for financial success.
Inks to more about Royal Legal
Twitter: https://twitter.com/royal_legal_law
Website: https://royallegalsolutions.com/
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