Land Trust quick questions please
Hello,
I have two questions regarding Land Trusts:
1) do I need to put my name down as the buyer when I sign the purchase agreeement with the seller OR do I put down the Trust name(111 Chase rd Trust)?
2) do I have to take the trustee with me to the closing table when doing double closing? so he can sign the deed and the trust agreement.
First deal I used my name. I need to start going the Land Trust route. I assume I sign my name on the contract with the seller, and at closing table, I have the agent deed it to the trust. Wrong???
Thank you in advance,
hrash
I'm not as well read as I used to be LOL! I've yet to a land trust. Wouldn't it be just as effective to buy the home and transfer it to the trust afterwards? I had somebody give me a $12,000 of land. I received the land prior to learning anything about land trust. When I do put the land in the land trust the trust should still protect me even though I didn’t form it immediately after getting the property.
FMM answer the questions LOL! I know I know LOL!
1. You would sign it with the land trust name
2. I would say no. I never heard of a person having to bring the trustee. There are some people that sign contracts under entity names without that entity even being in existence. This works because they have boilerplate documents with there lawyer to form whatever type of entity they need on demand.
thanks for the response ...
Another question then...
if I purchase using "122 river St Trust" , then I can NOT just assign the interest to buyer investor for finder fee, because the deed is not in the trust yet till closing time. Right?
So I do have to do a double closing then. One to get deed to trust and one to assign interest to buyer. Right?
thanks, hrash
Been a while since somebody pushed me in a corner for some knowledge. I'll try my best. Everybody benifits maybe somebody will come up in here and fill in my blanks
I'm kinda venturing out on this one. What reason would you have to try to transfer interest in the land trust prior to closing (usually the land trust is used by the investor with the funds)? When you close the money isn't due right there is a time lag afterwords. If you were planning to flip (you already had the buyer lined up) why would you need your name to be hidden from public record (that’s purpose of land trust)? When you say finders fee are you referring to birddogging? Birddogs shouldn’t be doing anything with title companies or land trust any way.
To my knowledge when you transfer interest (hope I’m using the right words) in a land trust to another investor that’s between you and that investor and your lawyer. The initial purpose of these methods was to get around the banks no assignment rules. The philosophy is to buy as an entity and transfer the interest or rights or whatever the proper word is to another investor without the bank knowing. The bank will still think they are dealing with you. I’ve heard the banks don’t like sell to land trust sso people started using LLC’s.
Future-Multi-millionaire,
Good point ...
My initial purpose was to get around the banks no assignment rules. So I figured if I do not want to do the double closing, I can use assignment of contract and Land trust. This is what I had in mind:
1) I thought I could get the seller to sign the purchase agreement with my Trust name as the buyer. So now the trust has the contract with the seller. Thus it can assign the contract to someone else(see step 2). At this point, there is really no trust formed yet.
2) Then I would have my buyer sign the assignment of contract(the assignor is the 111 River St trust). This assignment is assigning the contract owned by land trust to the buyer as if the trust is like a person assigning its contract to the buyer.(not sure if trust can do this)
3) Now at the closing, my buyer can actually form the land trust and place the deed into the trust. SO as you mentioned as well, the bank will not know the difference. I know banks are disallowing using Land Trusts now.
Does this make any sense, or do I have the Land Trust and what it can/can't do all wrong???
Is William Bronchick or Shawn Casey or other land trust gurus reading this as well?? Am I going crazy?
The primary function for the land trust is to shield your name from public record. If you are planning on flipping the property as soon as you purchase it what is the purpose of the trust. It would be much easier to use an LLC. I’m pretty sure the majority of the banks are going to frown upon the land trust buyers. If you use the LLC method you still avoid the double closing cost.
I hope you find the answers you're searching for. FMM gracious stepping down
The only problem with this is that then your name is on record and it kinda hurts you. As you mentioned earlier, the whole purpose of a LT is to remain anonymous. However, if you purchase a property as yourself and then Deed it over to a land trust, you leave a trail. That is why it is best to setup up the Land trust on the Title and then have your LLC as the trustee for Asset protection.
-John
Mr. Vodka
Quote:
On 2003-05-29 09:12, Future-Multi-millionaire wrote:
I'm not as well read as I used to be LOL! I've yet to a land trust. Wouldn't it be just as effective to buy the home and transfer it to the trust afterwards? I had somebody give me a $12,000 of land. I received the land prior to learning anything about land trust. When I do put the land in the land trust the trust should still protect me even though I didn’t form it immediately after getting the property.
FMM answer the questions LOL! I know I know LOL!
1. You would sign it with the land trust name
2. I would say no. I never heard of a person having to bring the trustee. There are some people that sign contracts under entity names without that entity even being in existence. This works because they have boilerplate documents with there lawyer to form whatever type of entity they need on demand.