Why to Use Land Trusts to Transfer Your Property to an LLC

in #money5 years ago (edited)


It's amazing how many tools there are at our disposal when it comes to real estate investing. I'd like to talk about one that can come in handy when dealing with the issue of getting loans, but wanting to have your property in an LLC.

Note: this is not legal advice, please check with your attorney when making any such transactions.

Get the Loan - Then transfer into LLC by way of Land Trust


Using a land trust is always a good idea, regardless. It provides anonymity for the owner which protects you because you can't get sued if it cannot be proven you own the property.

Additionally, when a title is transferred to a land trust it doesn't trigger the due on sale clause that is part of a traditional mortgage.

Generally when title changes hands it triggers the loan to be paid in full.

Now push it to the LLC

Once the property is in your land trust you can then transfer the title to your LLC. Then make sure your LLC has an operating agreement in place to manage that property within the trust.

Basically this gives us a way to take a property that we buy in our own names, usually in order to qualify for a traditional mortgage, and move it into our LLC.

Remember - owning investment properties in your own name is a liability risk. Yes, insurance is great but only goes so far. Having properties in entities like land trusts and LLCs provides protection for you and the assets you've worked so hard to accumulate.

If you are just getting started in real estate investing then check out the ScaredyCatGuide to Investing in Rental Properties Video Tutorial

 

 



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I just learned something new today! A great structure to protect what can be built and the future! I really have to take this one into consideration for my properties as I continue to maneuver around them.

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Glad I could be of service! Let me know when you are ready to sell any of them I got you taken care of! :-)

LLCs and trusts are essential tools for real estate.

I really wish they weren't, but in today's litigious society it is a must.
And often have several LLCs, so you can move assets (and liabilities) around.

Bah, just getting a lawsuit to/from a renter can tie up a property when you really need it clear. Don't let the cancer spread.


Is there any good ways to buy a property and then rent it to yourself?

So that a ... lets say you let a woman stay over for a bit, because you are a softy and she was thrown out on the street, then she calls the cops swearing abuse.

Now, you are thrown out of your own property... but if you are merely renting, you just start simple eviction... that has nothing to do with you.

(and it doesn't have to be a woman, it could be your cousin, who now claims he is/was a renter.)

Pretty genius actually, property is in a trust where the LLC is the beneficiary. The trust/LLC rents it out to you the "tenant."

It's a legal entity renting to a personal name.....don't see why that wouldn't work. But then again I'm not a lawyer.

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