Deed / Control Of Property Question
If an Investor purchased a piece of property utilizing creative financing, and at closing signed a Quick Claim Deed over to the person/group that they were doing the creative financing with, BUT, later found that the group wasn't basically on the up and up, and the Quick claim deed was NEVER filed (30 day period lapsed) and decided they they wanted out of the group but wanted to retain control of this property that current has a mortgage in their name, what are the options?
Can they do another Quick Claim deed to get this property (which is still in their name) out of their name and into a trust or a family members name would this keep the creative financing group from stepping in and filing the (old) Quick claim deed and taking possession/control of the property?
Theory is (could be wrong)....
Since the 1st Quick Claim Deed was never filed that the 2nd Quick claim deed would then cause the first to be invaild since it was signed over from person A to the group, and now person A isn't even on title....
Any suggestion on how one would handle this? The group promised that there was a LLC set up that the property would be signed over to for protection, but after investigation, it was discovered that the LLC doesn't even exist.
Please advise.... 
If the trust is beneficiary directed, the trustee can't do anything without the beneficiary's express written permission.
Darryle,
You know that and I know that, but a lot of other people do not. There is a fellow in Florida that sold something like eighteen houses as trustee and split before anyone knew what happened. The police say it is a civil matter so the investors(beneficiaries) might not ever get their money back.
JohnCl
JohnCI,
I always use two trusts, one to hold beneficial interest in a trust deed which is recorded prior to the grant deed to the trustee and the other to hold the real property itself.. If you are the beneficiary of the trust which holds beneficial in the trust deed ..............the trustee named in the grant deed takes title subject to your superior www.lien.If later the trustee decides to dispose of the property without permission, the escrow/title company will notify you of his wrongdoing when they send you a demand for payoff on your lien.
JohnCI:
You could do what a couple investor friends of mine do who both have retailed over 1000 houses. They put themselves as both the trustee and beneficiary.
They told me their whole theory on this is to prevent the property from coming up if someone did a title search on their name. The trust is set up so that they could transfer their beneficial interest at any time.
Food for thought!
Best Riches,
Jeff Adam
[addsig]
Hi Jeff,
So what I am hearing is by transferring the deed form John Doe to the 1234 Main St. Trust with John Doe as both the trustee and beneficiary, anyone doing a title search based on John Doe would not find anything?
Am I understanding this correcty?
JohnCl
This is a great idea... except they don't have a trust. If the beneficiary and the trustee are the same, they just merged the trust into their own personal ownership.
Quote:
On 2005-01-06 19:22, JeffreyAdam wrote:
JohnCI:
You could do what a couple investor friends of mine do who both have retailed over 1000 houses. They put themselves as both the trustee and beneficiary.
They told me their whole theory on this is to prevent the property from coming up if someone did a title search on their name. The trust is set up so that they could transfer their beneficial interest at any time.
Food for thought!
Best Riches,
Jeff Adam
It is not reccomended to have both trustee and bennie the same, I think they call this a dry trust.
[addsig]
John:
This strategy is only for short term flip properties. The whole idea is to just muddy the waters...
If you are setting up for long-term properties that you are going to keep, then I would not recommend this way.
Best Riches,
Jeff Adam
[addsig]
The idea I like best for trusts is to set up a separate company where you own 100% of the interest but the officers (president, vice pres, etc) are your trusted friend. This new company is the trustee of your trust with your other entity as the beneficiary.
Everything can go along as planned and if you ever have a problem with your trusted friend, you can call an emergency shareholder meeting, "fire" your trusted friend, and hire yourself or a new trusted friend as the new officers.
This still doesn't solve the problem if you have no trusted friends. In this case you should hire a company and pay them to be the trustee.
Thanks everybody for the great discussion.
myfrogger: what sort of company does that?
JohnCl
A lot of your local title companies will do it for a fee.
Is the trust really as effective as some make it out to be.....If you record a deed then some weeks later an unknown "trust" is recorded against the same property, then a paper trail exists.
I don't know about other states, but here in California the trust documents are never recorded.
Darryle-CA,
Same here. I believe you can record if you want to, but people generally don't. What will be on Public Record is the name of the Trustee (IE:the buyer of the property on the deed which generally does get recorded). My question is how to control this guy.
JohnCl
mike1law,
I think the use of a trust would apply more towards creatively financed deals. Perfect for Sub-Tos, AFDs and the like. I believe the only time an investor's name really has to to be on public record is for a conventional lender. to finance them.
JohnCl
Well here in Chicago most banks have a trust department. They will be your trustee for a couple hundered bucks a year. And you don't have to worry about them selling your property because they have enough assets to sue and get your money back.
If you're going to bother to put together a trust spring for the other $200 per year.
Quote:So what I am hearing is by transferring the deed form John Doe to the 1234 Main St. Trust with John Doe as both the trustee and beneficiary, anyone doing a title search based on John Doe would not find anything?
Am I understanding this correcty?JohnCl,
Depends upon how your county records deeds. I have seen some recorded trusts that do show the trustee. The title search would show something like:John Doe, Trustee, 123 Main St TrustIn this instance, your name as the trustee would appear on the public record.
Quote:I always use two trusts, one to hold beneficial interest in a trust deed which is recorded prior to the grant deed to the trustee and the other to hold the real property itself.. If you are the beneficiary of the trust which holds beneficial in the trust deed ..............the trustee named in the grant deed takes title subject to your superior lien. If later the trustee decides to dispose of the property without permission, the escrow/title company will notify you of his wrongdoing when they send you a demand for payoff on your lien.Darryle-CA,
I am confused. Please explain how a trust creates a lien. I can see how this "notification" might work if you recorded a second mortgage, but I don't understand how a trust would require a payoff demand.