Income investing

Bigger Pockets: How to Counter the Biggest Risk of 2022’s Real Estate Cycle

Many homeowners have enjoyed tremendous increases in wealth over the past two years as home prices have soared. But with mortgage rates rising and sales starting to slow in many markets, 2022 poses a number of risks for today’s homeowners and buyers.

At the Bigger Pockets podcast, Doug Lodmell provides insight on how real estate investors can protect their wealth right now.

First, the concept of asset protection is critical in any asset, not just real estate. How assets are protected matters, and conditions can change rapidly.

By setting up asset protection strategies, you can’t stop a creditor from coming after you. But you can ensure that there are enough hurdles that most of the time, it won’t be worth the effort.

For real estate investors, setting up an LLC, trust, or limited partnership can limit the personal risk of any real estate investment.

That includes assets that have already been owned for years. And investors who personally own assets like real estate may want to transfer ownership to an LLC, even if it may technically be against the terms of a mortgage to do so.

Today’s prospective real estate investors might be waiting for a housing crash. By waiting, the reasoning is that it takes out the risk of being invested during a crash.

But what if the market moves significantly higher from here before crashing? A real estate owner could miss out on getting in… and profiting.


For the full engaging discussion on asset protection and real estate, listen here.