Land Trust For Sub2 Deals, Who Is Trustee Me Or LLC.
i was wondering when the property is deeded to the trustee of the land trust, will that be me personally or my LLC. if thats the case what will i say to the lender when calling about loan info, should i say im the pres. of the LLC which is the trustee or what? wouldnt that defeat the purpose of the trust. also when filling out power of attorneys, should i put myself on them or my LLC. Thanks, any insight or info would be great. Jeb.
Do what you will with the trustee issue. Find someone you trust completely, and list them as trustee, and transfer beneficial interest of the trust into your LLC. (You can get a new trustee at any time.)
When talking to the lender, you should have a "Power of Attorney Concerning Real Estate" listing the property, and an "Authorization to Release" form, signed by your seller and notarized. Once you have established your credentials with the lender, (by providing them copies of the forms) simply tell the lender that you are representing Mr. and Mrs. Seller on all matters concerning the subject property and ask for the information that you need.
Good luck,
Jeff
[ Edited by jeff12002 on Date 06/17/2004 ]
hhmmm.. i dont think i understand what your saying, because everything ive heard says to leave the seller on as beneficiary and i will be the trustee of the land trust, and then in a seperate transaction have them sign over beneficial rights. so should i not do it this way? also if i do it this way should i put my name as the trustee or my LLCs name. i think i am more confused now. i just want to know if the bank will have a problem talking to me if my LLC is the trustee, and i dont want to reveal that i own the LLC. plus i dont really trust anyone, so i dont know if i would want someone i dont trust as my trustee(if i set it up the way you are talking about)
When you have them establish the trust they are the beneficiaries. when you have them assign the beneficial interest of the trust to your llc, you have never personally been on the title. if you assign yourself as trustee, you have defeated this, which I assume was the whole reason for the land trust to begin with.
Sorry if I confused you earlier.
Jeff
You with the POA and the authorization to release, you can speak directly to the lender as the representative of the seller. You could place yourself as the trustee of the trust if you wish. That with the POA etc. doesn't reveal thet you are in reality the owner.
It doesn't have to be this complicated.
Where are you getting the info on land trusts?
Jeff
thanks Jeff. i get what you are saying that i should leave the seller as beneficiary and then have them sign over beneficiary rights to my LLC, and correct me if im wrong since i "personally" will be on the power of attorney and www.doc.to release info. then the lender will deal with me and not even worry about the trustee(or will i not even be on the POA, and will have the right to speak on there behalf just by possesing the forms), then appoint someone i trust as the trustee, this is the only part im a bit nausious about, will i then have to go through the trustee when i find a motivated seller. im sorry if im making this harder then it has to be but can you elaborate on that part a little more. ive been getting alot of info on this from here, and a book called "Making big money investing in foreclosures" by peter conti and david finkel. thanks for helping me with this issue.
You will be listed on the POA and the ATR. You can be listed as the Trustee.
The decision to be listed as the trustee is a personal decision, and should be determined by the goal that you have when you have the current owners establish the trust. If anonymity is your goal, then you shouldn't be the trustee.
The LLC can be used to hold the beneficial interest in the trust. That way it limits your personal liability in a potential law suit. (Nothing is complete protection, but this will cause most casual glances into your potential as a payday, not to make the attempt)
Remember, If you decide not to be the trustee, that the trustee works for you, and if the trust agreement states as much, they would be restricted from transferring title to anyone without your written consent, or they commit fraud, and could serve time as a result. Your attorney, Your mom, Dad, Any siblings of legal age, your female children at least 18 Y/O that don't share your last name are good examples of possible Trustees that you could select.
In scenario in the above posts. Seller created Trust, Signed beneficial interest over to your LLC, and made you trustee of the trust. You have two capacities. 1 as Trustee, and 1 as the managing partner of the trust. I don't see anywhere that you are on the title "personally", Do you?
Part of your question above read somethin like "now do have to go through the trustee when I find a motivated seller?" At this point you are looking for a buyer, not a seller, and yes the Trustee's job per your written instructions when you sell is to deliver title to the property to the new buyers.
Good luck,
Jeff[ Edited by jeff12002 on Date 06/18/2004 ]
okay, now i have been reading the post and i am still new at this. but, when you first set up the land trust and you assign the seller as the benificiary and then do you assign you LLC as the trustee? THEN sign the benifi. rights to your LLC and have the LLC be both the benif. and the trustee? Or can you not do that? this whole post really confused the hell out of me. Thanks
OK, Step - By- Step.
. Now would be a god time to get the POA, and Auth To Rel. documents Signed.
1) The Sellers establish a Land Trust, Complete with Exhibit "B" listing the sellers with full ownership of the trust. (This is done with your help) The seller can list you as trustee right now.
2) Seller completes the "Warranty Deed To Trustee" (deeds property to you, "As Trustee"
3) Seller signs the beneficial Interest of "THEIR" Trust over to your LLC. Making the trust the property of the LLC.
4) Have the signatures notarized on the forms in the same order as completed above.
This is assuming that you have a Purchase and Sale Agreement completed, and have paid them something, Etc.
5) Do your "Due Dilligence" and check things out. If all is as it should be with the title etc. You file the Warranty Deed given to you by the sellers.
6) Do the things you promised the seller's you would when you acquired the property.
7) Repeat as necessary with new properties.[ Edited by jeff12002 on Date 06/18/2004 ]
thanks jeff, now i understand completly. again thank you for your time, and effort.
oh yeah, i have one more question. i looked through past posts on this but i couldnt find any info. my question is when selling the house conventionally i heard that many lenders will not lend to a house in a trust. so i will have to disable the trust when i sell? and when i do this dosnt it reveal that my LLC has the beneficiary interest? will the bank know about it, and will it effect the DOS? thanx again.
There are lenders that will lend to trusts and LLC.
As far as the LLC being the buyer, seller, or trustee, The LLC (usually) has a manager who os a real person that askson behalf the LLC. So just think of the manager of the LLC as the LLC is that makes it easier.
Hello All: I have a question on this same topic.
Since I have not completed a transaction with a Land Trust before, I would think that a Seller would be hesitant to set up a trust simply to be able to deed you the property (or might get confused by the whole process). Can't you simply set up the Land Trust yourself (calling it something like Seller's Name Family Trust) with your LLC as beneficiary and have them deed the property to your trustee. That way you could avoid confusing the Seller and not have to depend on them assigning their beneficial interest? [ Edited by Pearly on Date 06/18/2004 ]
generally when you sell conventionally, you will not be selling to someone that is as sophisticated as you are when it comes to creative REI. When you (or your trustee) deed the property to your buyer, The trust is no longer funded, and a dead issue. Remember, the lender isn't loaning money on your house, it's lending money on the buyers new house. Same house, big difference. Just deliver a good title to the buyer. No problems!
Pearly,
You cannot put a property in trust that you don't own. If you take title personally, and then transfer the property into a trust, You were on the title personally. Sort of ruins the whole anonymity thing. If you are going to do this, why bother with the trust?
thanks again Jeff, youve been a tremendous help.
Quote:
On 2004-06-18 16:15, lukabrasi wrote:
my question is when selling the house conventionally i heard that many lenders will not lend to a house in a trust. so i will have to disable the trust when i sell? and when i do this dosnt it reveal that my LLC has the beneficiary interest? will the bank know about it, and will it effect the DOS? thanx again.
Why in the world would a lender even consider doing anything about a DOS on a loan that is about to be paid off?
You have been spending too much energy worrying about DOS Clauses. Banks have other more pressing issues than to worry about calling loans due that are kept current.
Moving on?
Jeff
hi, so you are saying that you dont have to do any paper work to disable a trust because it it automatically disabled when you sell it becasue it comes out of the trust and to the new buyers name or llc becasue tey are buying conven.?because i thought the trust kind of hides the title and in order to get through it it would have to be disabled. maybe this is a ridiculous question but it is late at nite :-0
It's my understanding that if the Trust isn't funded,(Has no assets) It is no longer a legitimate entity. Second point. Keep the paperwork for a period of time. The paperwork that you had is the only documentation of the trust. If there is question about the title that your trustee issued, you may need the trust documents to support it (Not sure, but it's better to be safe than sorry). When you instruct your Trustee to deliver title to the new buyer, The title will be issued to Mr. and Mrs. Seller, (No Trustee, No Trust) Just like a conventional sale. That's exactly what it is.
Remember, When you're buying you're using creative methods to negotiate the deal, and make things happen. When you sell you could be using creative methods to make the transaction happen. The title transfer itself is not creative. It goes from oneperson/entity to another. That's it. If you can deliver marketable title when the time comes, that's all that's really required.