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How Investment Real Estate Funding in Indiana Can Protect Your Assets

With a long, stable, and successful track record, real estate is considered one of the best investment options. Real estate investments help to create a healthy and diversified portfolio which ultimately secures your assets. With nearly 20 million rental properties and over half a million new apartment developments in 2024, real estate investment opportunities are healthy and continuing to grow

Even with the potential investment properties and developments have to offer, it is vital that you know how to protect your real estate assets with proper funding options. Investment real estate funding options are generally considered more flexible, secure, and customizable than traditional lending. There are even some avenues for funding that provide an added layer of security for you and your assets. Here is what you need to know about investment real estate funding and how to protect assets with real estate.

General Rules for Asset Protection

All investors should be familiar with the idea of asset protection and some of the primary strategies for protecting your investments. 

Investment Assets

Assets include any property owned by an individual or entity that is considered financially valuable. Often, assets are also things considered liquid or available to use against debts if needed.

Asset Protection 

Protecting your assets involves the use of legal techniques, processes, or vehicles to protect your assets from creditors or potential lawsuits. Means of asset protection may include:

  • Using specific investment vehicles
  • Drawing up fiduciary contracts and trusts
  • Creating business entities to house and separate your assets
  • Choosing appropriate and adequate insurance coverage

 

While some asset protection strategies may not directly apply to investment real estate, many general protection techniques still apply, including various insurance types, creating entities to separate your personal and business assets, and maximizing state-specific homestead benefits. Keep reading to learn more about these real estate asset protection-specific strategies.

What Is Investment Real Estate Funding?

Before diving into the specifics, let’s define some of the basics of investment real estate funding with some key terms and examples of lending options.

Investment Real Estate Funding 

Investment real estate lending options include financial strategies for acquiring, managing, or developing properties to generate income or capital gain over time. Whether commercial, residential, or mixed-use, the goal of investment real estate lending is accessing property with leveraged capital against anticipated rental income or increasing property values.

Common examples of investment real estate funding strategies in Indiana may include: 

  • Traditional mortgage loans
  • Private lending
  • Crowdfunding
  • Homestead policies
  • Hard money loans
  • Real estate trusts

 

The team at Midwest Business Funding is ready to share our ample knowledge and experience working with multiple investment real estate funding options. To help you find the option that best fits your investment plan, contact us today at  317-606-3595 or fill out our web form to get started.

 

Funding Options with Added Real Estate Protections

1. Establish an LLC 

Limiting liability companies, or LLCs, protect individuals by separating their personal and business assets. For smaller real estate portfolios, some investors operate under a single LLC. Others chose to establish a different LLC for each property they own, particularly for larger portfolios, to better separate assets. 

Creating this separation limits what creditors are entitled to go after if your property defaults. They are typically only able to seek assets within the specific LLC named on the property rather than all the real estate assets or personal assets in your portfolio.

2. Take Part in a Real Estate Investment Trust

Real estate investment trusts (REITs) own and manage a group of income-producing commercial real estate. This can include the purchasing and development of properties, but these entities typically plan to retain their developments instead of reselling them. All REITs must register with the SEC, but some are publicly traded while others remain private. 

For the investor, participating in REITs offers the opportunity to participate in a large real estate portfolio and diversify their investment types without needing to outright purchase the properties. REITs are also subject to certain tax structures and inflation protections that ultimately increase and maintain their yields. Overall, REITs offer investors a means to get involved in real estate without the direct risk of solely owning the property.

3. Other Strategies to Protect Your Real Estate Investment

As the saying goes, “The best offense is a good defense.” This sentiment applies directly to real estate asset protection as well. In addition to specific financial strategies, here are some basic considerations to further protect your real estate investment assets.

 

  • Screening Renters: Spend the time to get to know your potential renters. Taking a few extra steps, including background checks, to ensure you are signing with reliable tenants can increase the chances of a successful rental experience and rental income collection.

 

  • Get the Right Insurance: Finding the right coverage for your rental property can go a long way in reducing your liability in a potential lawsuit or costs for unintended damages. This may include landlord insurance, umbrella policies, and more. Get with a real estate insurance expert to better understand the types and amount of coverage you may need.

 

  • Homestead Deductions or Credits: Indiana state policies outline specific homestead benefits for personal residences. Understanding these deductions and credits can help you protect a large amount of one of your largest assets: real estate property.

 

Midwest Business Funding can help you walk through your investment plan and select the most secure funding options to fit your situation, as well as general strategies you may want to consider. Contact us today at  317-606-3595 or fill out our web form to get started.

 

Protect Your Real Estate Investments with Midwest Business Funding

Asset protection is an integral part of investment planning and management. There are asset protection strategies in real estate that can help secure your investments from every angle, including funding source opportunities. The experienced investment real estate funding experts at Midwest Business Funding can walk you through the multiple funding options available to help you build a secure, successful plan that’s right for your investment.

 

Ready to get started with investment real estate funding? Contact us today at  317-606-3595 or fill out our web form to get started.

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