Asset Protection Secrets Every Real Estate Investor Must Know in 2026

Garrett Sutton (00:00)

Well, I think if you can get into the market, it’s great. And so, you know, the strength is your resiliency and ability to get into the market. And a lot of people, you know, they call it the paralysis of analysis. They they just they spend way too much time analyzing everything. And at the start, you know you’re gonna make some mistakes, right? And so you you just need to get that investment and protect it properly and get started. And I know that properties are expensive right now, but you know, the market is always shifting and there are opportunities coming for people who wanna start investing in real estate.

Scott Bursey (02:13)

Welcome back to the Real Estate Pros podcast, powered by Investor Fuel. I’m your host, Scott Bursey. And today we are sitting down with a true pro in the asset protection space. Garrett Sutton is a renowned attorney, bestselling author in the Rich Dad series, and the founder of Corporate Direct. With his books, including Start Your Own Corporation and Real Estate Loopholes, having sold over one million copies, Garrett is the definitive expert on helping real estate investors protect their assets and master their corporate structures. Garrett, welcome to the show.

Garrett Sutton (02:48)

Thanks, Scott. Great to be here.

Scott Bursey (02:50)

It’s an absolute honor to have you here, Counselor, and to help our listeners get up to speed, please give us the front row seat on how your career ignited and where you’re pouring your fuel now.

Garrett Sutton (03:02)

well I I I’m sorry, could you repeat the question again?

Scott Bursey (03:07)

Certainly. tell us a little bit about yourself and Corporate Direct.

Garrett Sutton (03:12)

Great. So I grew up in the San Francisco Bay Area. I went to Berkeley and then Hastings Law School in San Francisco. And you know, California was getting too crowded. I’d spend all my summers up at Lake Tahoe. I love to ski. So I moved to Reno, Nevada, and Nevada’s a great state for asset protection. I had to take the Nevada bar exam all over again. That was tough. But got that through and have been assisting people with their asset protection goals and strategies since the year 2000. I was very fortunate to become associated with Robert Kiyosaki and the Rich Dad Group. And so I’ve written eight books in the Rich Dad series. and like you said, I’ve sold a million copies over the last 20 years. So working with Robert Kiyosaki and the team has been great. It’s allowed me to travel all over the world to talk about financial education and asset protection. my son Ted went to the University of Wyoming Law School. We like the state of Wyoming for asset protection. And so he is— has come into the practice and will be taking it over so I can you know pursue other endeavors. But that’s gonna be, you know, a a five-to-ten-year process. So I’m still practicing law and enjoying it and you know, to be on a show like yours, Scott, is just great to to talk to people and explain some of the benefits that the law allows for real estate investors to protect themselves.

Scott Bursey (04:46)

Summary for that, counselor. And what really caught my attention about you, Garrett, was the way that you’ve been able to simplify complex legal structures for over twenty years, helping everyday investors safeguard their future through your work at Corporate Direct. That’s some powerful stuff.

Garrett Sutton (05:06)

Well, it’s been great. And I talked to people from all over the country, all over the world. We set up LLCs for peop— for foreign nationals that want to invest in the US. Our doors are open for that. And it’s been really rewarding to talk to people and then help them get started with their first investment and then see them grow through 1031 exchanges, through continuing efforts to to benefit themselves and their families. And you know, one of the keys to asset protection, Scott, is you gotta do it right from the start. When you buy that first property, you’re not gonna put it in your individual name. There’s just too much risk these days. So you’re gonna set up an LLC. we’re gonna structure it properly, and you’re gonna protect yourself from day one.

Scott Bursey (06:42)

And I’m curious to know, Garrett, looking at the success of your firm, what do you see as the primary strength for an investor starting their first LLC today?

Garrett Sutton (06:53)

Well, I think if you can get into the market, it’s great. And so, you know, the strength is your resiliency and ability to get into the market. And a lot of people, you know, they call it the paralysis of analysis. They they just they spend way too much time analyzing everything. And at the start, you know you’re gonna make some mistakes, right? And so you you just need to get that investment and protect it properly and get started. And I know that properties are expensive right now, but you know, the market is always shifting and there are opportunities coming for people who wanna start investing in real estate.

Scott Bursey (07:35)

What is the one thing they should focus on getting right immediately as far as the LLC is concerned, counselor?

Garrett Sutton (07:42)

Well, I think you want to use a reputable service to to set up your LLC. You know, too many people are into the DIY, do-it-yourself. And what we’ve seen is the DIY leads to do yourself in. I mean, people make the mistakes and they don’t know that they’ve made the mistakes. Unfortunately, they don’t teach corporations and LLCs and schools. So you have to gain this information on your own, which is why I’ve written the books, Start Your Own Corporation, Loopholes of Real Estate. but you have to gain that information on your own. And you really need help properly setting up the operating agreement, doing, you know, you’ve got to— you’ve got to issue the stock certificates, the membership interest certificates. If the IRS comes calling on a surprise audit and you don’t have those certificates, which most online services don’t set up for you, you’re in trouble. So you wanna use a reputable service that’s gonna give you all the documents you need to make sure that you’re completely protected.

Scott Bursey (08:47)

That makes perfect sense. And we love to hear your perspective on this. What is the most common weakness or blind spot you see in investors who are scaling their portfolios without proper protection?

Garrett Sutton (09:01)

Well, I mean, we see the horror stories where people have set up an LLC that doesn’t properly protect them. They they maybe have the articles for— filed with the state, but they don’t have an operating agreement. They haven’t set up the proper LLC bank account, they haven’t gotten the EIN for the bank account. And when you do it the wrong way, people can come in and pierce the veil of protection. And I wrote a whole book called Veil Not Fail. Because people think that by just setting up the LLC they’re protected. Well, no. You need to tr— transfer title from your name into the name of the LLC. You need to do annual minutes. You need to pay the annual filing fees to the state. And if you don’t know this going in, you’re not going to properly file with the state. And then you’ve lost your protection. So there’s ongoing obligations that you have to make sure that your LLC is protected. And I gotta tell you, Scott, too many people forget about it and then it’s too late.

Scott Bursey (10:07)

Absolutely. And what’s the old saying, the adage, counselor, you’ve got to build the fence before you put the cattle in it?

Garrett Sutton (10:15)

That’s right. And you do want to build a fence. That’s a great analogy, Scott, because you know, when you have a number of properties, you want to build a fence around all of them. You don’t want to put 10 properties in one LLC. If you get sued over one LLC, they have a claim against the LLC, which happens to own 10 properties. They can reach the equity in all 10 properties. So you want to build a fence with a number of LLCs as you grow to protect those assets accordingly.

Scott Bursey (10:47)

Appreciate you highlighting that and interested to know, given the current market climate, where do you see the biggest opportunity for investors to utilize corporate structures to actually leverage their tax position?

Garrett Sutton (11:36)

Well, I think that having a team to assist you in your real estate activities is important. So you want a CPA on your team. You want a lawyer that knows asset protection. Not every attorney does. You know, the the pri— the personal injury attorneys don’t really know asset protection, which is actually good. so you also want a banker on your team. you know, so you want these people to be on your team and work with you. because you don’t have time to learn the ins and outs of the tax code. You don’t have time to understand the nuances of LLCs, and you have team members that will help you do that, but you need to have a team you can rely on. If if you call an attorney and it takes you six weeks to get a return call, you may need a new attorney.

Scott Bursey (12:26)

On that note, is there a specific strategy people are overlooking right now?

Garrett Sutton (12:32)

Well, I think a lot of people are talking or thinking that AI can handle their legal work for them. And we have seen so many mistakes come through. You know, we had a client just the other day say, “You know, I formed my LLC and the AI provided an operating agreement,” and we said, “All right, we’ll look at it.” And we looked at it and it just had 10 major errors in it. And so the— the idea that you can rely on AI for all your legal work, I think is something that people need to really open their eyes to. It’s it’s not providing you with great legal services. The same is with taxes. You know, a lot of people are saying, “Well, I’m gonna have AI do my taxes,” but I think you need that human judgment to really maximize the tax code.

Scott Bursey (13:24)

That’s a great angle, counselor. And thinking about the real estate loopholes you’ve written about, what is the biggest legal threat investors are facing in today’s, you know, litigious environment?

Garrett Sutton (13:39)

Well, a couple of threats are out there. I mean, certainly we have a society of lawyers who are rewarded for bringing claims. you know, the every billboard out there is for an attorney that, you know, “In a wreck, get a check.” And so that attitude has kind of prevailed on our society now that if if you’ve been harmed, you’re entitled to compensation. And people are now suing at— at greater levels than ever. And so we live in this litigious society. And if you own assets in your individual name, the attorneys love that because they can get at them. And so you want to take title to these assets, not only real estate, but stocks, bonds, crypto. You want to protect all your assets with the proper use of LLCs. And then we also want you to have an umbrella policy of personal insurance. Because one of the biggest risks out there is a horrific car wreck. And so by having that umbrella policy for your home and auto, an extra million or two to cover that kind of claim, the attorneys know how to get at the insurance money. They’re not good at getting through Wyoming or Nevada LLCs. So we want a combination of insurance is the first line of defense, and then these entities are the second line of defense. And too many people think that insurance will protect them. And as we know, insurance companies have an economic incentive to not cover every claim. You know, the contracts have— is written in this small bullet point type that you can’t understand. And there are reasons or or excuses that they can use to not cover you. And in that situation, you really need an LLC for protection. Otherwise, all of your assets are exposed.

Scott Bursey (15:31)

That’s a sobering reality right there. And Garrett, if you had to distill your decades of experience down to one piece of advice for someone trying to move from a hobbyist investor to a professional operation, what is the one move that unlocks the most growth?

Garrett Sutton (16:30)

Well, that’s a good question. There there are a couple ways to go there, Scott. The one move that would unlock the most growth, I don’t know, some people, you know, realize that they don’t have all the money that to— to keep investing, so they syndicate. So, you know, a lot of people are getting into syndication, which allows them to go after bigger deals. Now, when you syndicate, you have to use the proper legal documents, the private placement memorandum, the subscription agreement that says that the investor understands what they’re getting into. So if you get into syndication, and we don’t do this work, we set up the LLCs and all, but if you get into syndication, you really— you really need a great attorney on your side to make sure that all the documents are there to protect you. Cause when you syndicate, you need protection. People get sued all the time over syndications.

Scott Bursey (17:26)

Thank you for highlighting that. And you’ve given us some great advice. But counselor, what additional advice can you leave with our pros here today?

Garrett Sutton (17:37)

Well, I think that a lot of people think that they— they well, they know that they need an LLC for asset protection. But they get started and they’re busy and sometimes they overlook it. Or sometimes their CPA says, “You’re not making enough money now. just set up the LLC later.” and that’s why we tell the joke that CPA stands for “cannot protect assets.” You know, because so many CPAs for some reason say don’t set up the LLC yet. You need to set it up right at the start. If you have that asset in your individual name and you intend to set up an LLC in six months, but during that six-month period, if you get sued by a tenant, title is in your individual name. All of your assets are exposed. So right off the bat, you want to set up that LLC. It is not expensive. I mean, if you go to Corporate Direct, you can find out how much we charge. We offer a free 15-minute consultation. And you know, you can go to Corporate Direct and— and set up a consultation and talk to our staff who are well trained and we provide a very affordable fee for this. So don’t let these professionals tell you that you don’t need the asset protection at the start, that it’s too expensive. It’s not expensive and you do need it right at the start.

Scott Bursey (18:56)

Thanks for dropping that knowledge. And if our listeners want to follow your journey or collaborate with you, what’s the best way for them to reach out?

Garrett Sutton (19:05)

corporatedirect.com is the best way to go. And my son has a channel where he does YouTube videos on various topics. we also have a website— YouTube channel called TENERO T-E-N-E-R-O where we provide financial and legal advice. so we’re offering information to people so that they can be better prepared and better investors.

Scott Bursey (19:35)

Thank you for joining us today, Garrett.

Garrett Sutton (19:38)

Thank you, Scott.

Scott Bursey (19:41)

This has been an absolute pleasure. And to our listeners, we appreciate you. If you receive value from today’s episode, please subscribe. We’ll be filling your tanks with the lineup of elite guests just like Garrett Sutton, who are accelerating and setting the pace for the rest of the industry. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.