Land Trust / Trustee
Hello fellow investors ,
I have a challenging question for anybody who feels they have the answer.
1st question that I have is - how do land trust work ?
2nd question I have is - say if you were going to purcase a house but you dont have the credit to do so , would it possible for you to purchase in your trustee's name ?
thanks and good luck to every R>E>I .
You should consult a real estate attorney concerning land trusts if you are going to implement one. You can pick up a book at your local bookstore and/or library on land trusts in your state.
Even if you use a land trust, then the lender almost always requires someone to be held liable for the loan. They may not lend you money if you placed it in the land trust. So read up on it and consult an attorney before taking that route.
Tanya
Hello fellow investors ,
I have a challenging question for anybody who feels they have the answer.
Land Trusts are not an entity like a corporation. The land trust doesn't "own" anything. It simply designates who the grantor is (the person who put the property into the trust), the trustee (the person who regulates and can legally sign documents, etc) and the Benefactor (the person or entity who now "owns" the trust.)
The grantor and the beneficiary are often the same person, unless it's sold. When you change the benificiary, the documents are not recorded. The greatest benefit of a land trust is that it helps to ensure privacy and it helps lendsers from knowing when the property changes hands so that they don't enforce the DOS clause.
The answer to your second question, is "No" (unless your trustee was also your business partner). If you had poor credit, but you had a company with great business credit, then that's a different story, but the trustee would be like your family's attorney.
The grantor, trustee, or beneficiary can be individuals or companies. Hope this helps.
B izMan624:
There are lenders who will loan to the Land Trust ...both Lehman Bros. & WAMU do these Land Trust lending.
However they do require a personal guarantee the main factors for granting the loan will be the property, LTV, and use of funds.
Thier qualifying criteria are very hurdles to jump but not impossible.
Personally, I get a tenant-buyer into the property to split any future appreciation and structure a lease/option within the Trust...
This will allow my tenant-buyer to QUALIFY as a REFI vs. New Purchase borrower in order to reduce the difficulty of the purchase transation.
If I just wanted to get some cash out to the original seller, I'd ask them to refi and take cash out and my 'Partner' (tenant -buyer) will make all of the payments on the property.
Or
I could mkt to locate a passive investor to make alon on the property in Trust in turn for a % of the Benefical Interest in the Trust's A$$ets! (by reselling him a percent of my own interest in the Trust property.)
If you'd like to see how I do these and/or to locate other RE Investor that will make loans to Trusts then Pvt. Mail me OK?
I hope this help!
Derrick Ali