How Do You Hold Your Properties?
Just wondering.....how do you all hold your sub 2 properties and why have you chosen your preferred method? Do you hold in a trust and is there a difference between land trust and title bearing trust (not sure if that is right)? If you use a trust, how do you have the trustee worded in the trust? OR, do you just deed the property to yourself and quit claim it to your LLC?
Does anyone hold title on their sub2's for lease option?
I use an S-corp for quick flips and an llc for longer term holds. If you are buying sub2 and rehabbing then an S-corp....if you are selling on land contract or keeping as a rental then an llc.
Your aquisition strategy had nothing to do with how you should hold the property....your exit strategy does.
Are there any trust experts out there? Thanks myfrogger for your answer.
db:
I think if you look through the archives here you'll find a mix of both strategies. Some investors swear by land trusts, others just take the property in their corp (LLC, s- or c-corps: see myfrogger's advice above), others (especially just-starters) just take them in their own names (IMHO not too safe a method).
It comes down to your comfort zone as it relates to DOS: trusts have an advantage in shielding any transfer from the seller to you, but they do add a level of complexity that (in some cases) can scare off a seller (or even the beginning investor).
[Before anyone flames me here, I obviously understand that it's all in your presentation of setting up the trust and in the motivation of the seller as to whether this flies or not.]
My feeling is no matter which I do, my LLC is going to be either taking title or becoming the beneficiary of the trust: privacy/DOS issues aside, I prefer the asset protection provided by the corporation.
My .02, not legal advice by any means, always consult professional legal advice, etc.
Andy
I [ Edited by arytkatz on Date 05/06/2004 ]