How to Structure Investing Entities to Maximize Tax Benefits & Protect Wealth | Jonathan Feniak

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The #1 Mistake That Could Destroy Your Real Estate Portfolio (And How to Protect Yourself)

What if one misstep in your business structure could wipe out your wealth overnight?
That’s not clickbait—it’s a real risk most real estate investors and entrepreneurs unknowingly face.

In Episode 978 of the Millionaire Mindcast, I sat down with Jonathan Feniak, attorney and partner at LLCAttorney.com, to unpack how to protect your business, real estate, and legacy using the right entity structure. Jonathan brings over two decades of experience in law, hedge funds, and wealth management—and he’s seen firsthand how bad entity setups can cost people everything.

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Quick Takeaways: What You’ll Learn

• “LLC vs S-Corp vs Trust?” Most people get it wrong. Here’s how to pick the right one.
• The single mistake that can pierce your corporate veil—and expose your personal assets
• Why too many LLCs can hurt you as much as having none at all
• State matters: Why Wyoming might be the best place to form your LLC (even if you live elsewhere)
• How one investor turned 100 doors into 22 LLCs—with perfect protection and efficiency
• Fix-and-flippers: Why using “vintages” can save your entire business in a lawsuit

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Entity Structuring 101: Protecting Your Wealth Begins Here

Why Entity Structuring Matters—Even If You’re Just Starting Out

“In business, failure is a possibility—but being wiped out doesn’t have to be.”

That’s the core of what Jonathan shared. Most people set up an LLC because someone told them to—but they don’t actually understand what it does. Worse, they copy a guru’s overly complex setup that’s not even relevant to their goals.

If you’re investing in real estate, starting a business, or scaling your portfolio—you must have an entity structure that:

• Minimizes your taxes
• Protects your personal assets
• Matches your current phase and risk profile

And it needs to be right-sized. Not overkill. Not bare minimum.

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Common Mistakes (And How To Fix Them)

Mistake #1: Overcomplicating Your Structure

“One guy put every $50K cabin in its own LLC and nearly bankrupted himself managing the paperwork.”

You don’t need 10 LLCs for 10 small properties. That’s admin overload and makes compliance harder. If you can’t manage the structure, the court may not honor it either.

Your Playbook

• Beginner: Start with one LLC per $250K in equity or per risk level.
• Intermediate: Consider a holding company that owns multiple property LLCs.
• Advanced: Use vintages (year-based entities) for active businesses like flips.

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Mistake #2: Using the Wrong Entity Type

“Almost nobody needs a C-Corp.”

Jonathan’s advice: Form an LLC, then choose your tax classification (S-Corp or C-Corp) based on income type and business activity. Don’t blindly form a corporation because someone said you need one.

Your Playbook

• Beginner: Single-member LLC for rentals
• Intermediate: S-Corp tax election for fix-and-flips or active income
• Advanced: Holding LLC with subsidiaries for syndications or JV deals

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Mistake #3: Ignoring Corporate Formalities

“A Venmo payment from a tenant to your personal account? That’s enough to pierce your LLC.”

If you don’t maintain separation—bank accounts, meeting minutes, contracts—the court can claim your LLC is just your “alter ego” and hold you personally liable.

Action Steps:

• Create and fund a business bank account
• Never pay or receive money personally for business activities
• Use meeting minutes—even if it’s just you—to document big decisions (e.g. hiring a contractor)

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Real Wins: From Risk to Resilience

Success Story: Inheriting 100 Doors—Without a Legal Nightmare
A client inherited 100 rental units across three LLCs—too much risk concentrated. Jonathan guided them to restructure into 22 LLCs, using a risk-equity matrix:

• High-risk properties (e.g., 4-unit Section 8 rentals): their own LLC
• Low-risk, high-value assets (e.g., condos in HOA communities): grouped

The result? Maximum protection, minimal maintenance.

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Expert Edge: Advanced Strategies That Work

• Wyoming LLCs: Strongest veil protection and best for holding entities—especially for investors in weak states like California or Florida.
• Revocable Living Trusts: Own your LLCs through a trust to avoid probate and ensure smooth wealth transfer.
• S-Corp for Fix & Flips: Reduce self-employment tax by classifying income correctly and paying yourself a reasonable salary.

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Final Thoughts: From Confusion to Clarity—Why Structure Is the Hidden Key to Wealth

In the early days of his journey, Jonathan Feniak was like many entrepreneurs—grinding long hours, raising a family, and navigating career changes across finance, logistics, and law. It wasn’t until he experienced the real-world consequences of poor planning (during the 2008 financial crisis and beyond) that he realized: legal structure isn’t paperwork—it’s protection.

Whether you're a full-time investor, a side hustler, or scaling a 7-figure business, the structure you choose will either amplify your wealth—or expose it to risk.

🛑 Don’t wait until a lawsuit or tax bill wakes you up.
✅ Get ahead now by aligning your entities with your strategy.

By making smart, simple decisions now—like forming the right kind of LLC, separating your personal and business finances, or putting your assets in a trust—you’re not just avoiding disaster… you’re building a durable foundation for long-term wealth.

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Stay Connected & Learn More

🎧 Listen to the full podcast episode here: LINK

👁️ Watch the full episode here: LINK

📩 Be part of the discussion! Join our Facebook group: LINK

📅 Book a coaching call w/ Matt Aitchison: LINK

🚀 Enroll in our EXPERT-led courses: LINK

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