We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
September 27, 2021, 10:28:51 am
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
September 27, 2021, 10:28:51 am
Home Help Search Calendar Login Register

Author Topic: Land Trusts for wholesaling  (Read 14164 times)

Offline JulietFogarty

  • Member
  • *
  • Posts: 9
Land Trusts for wholesaling
« on: February 12, 2003, 05:16:53 pm »
Wholesalers - Are you taking title in a land trust prior to passing it on to your buyer.  Why or why not are you doing this?  
Thanks!

Offline Admin

  • Administrator
  • Member
  • *****
  • Posts: 1076
I wouldn't...
« Reply #1 on: February 12, 2003, 05:53:08 pm »
JF,
If the goal is to not take ownership, then I wouldn't mess with a trust.  It just complicates things and confuses the players.

The question becomes what will you do if and/or when your buyer flakes on you?  Will you let it go or will you close it yourself?
There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous

Offline SCook85

  • Author
  • Member
  • *
  • Posts: 23
    • http://www.flippinghomes.com
Land Trusts and Wholesaling!
« Reply #2 on: February 25, 2003, 07:24:16 am »
Hi Julie,

Land trusts, or LLC's when wholesaling are only necessary when you need to creat an "assignable" situation.  If your contract is "non-assignable" you can purchase in the name of an LLC or Land Trust and then assign the entity rather then the contract.

If this is to confusing, or it is difficult for you to sell to others, I just suggest that you do simultaneous closes and eat the cost of doing the two deals.  You'll become more cofortable with these other methods as you go.
Happy Investing,
Steve Cook

Offline the lmb company

  • Member
  • *
  • Posts: 3
land trust
« Reply #3 on: February 26, 2003, 01:56:39 pm »
Tim,
Are the land trust you talk about something that an attorney has to do or can you get a template of a blank land trust and just fill it out and have it recorded?

The first knowledge I heard of "land trust" were something called pactrust or ehtrust.  Also, I was told that a company  in Illlinois would do it for me for $500 a pop.  I appreciate any info you might be able to offer.  :help

thanks mike in Waco
ps: I really enjoy this board.

Offline SCook85

  • Author
  • Member
  • *
  • Posts: 23
    • http://www.flippinghomes.com
Land Trusts and Wholesaling
« Reply #4 on: February 26, 2003, 02:05:26 pm »
Hi Mike,

There are templates that you can use to set up your own land trusts.  In addition to that they do not need to be reorded.

Pact Trust is something invented by Bill Gatten, used to acquire properties without excercising the due on sale clause.  I have never read his info so I can't comment on it.  It just sounds to complicated which is why I haven't read it.

Entrust is a company that administers IRA's.

Save your $500 and do your landtrusts yourself.
Happy Investing,
Steve Cook

Offline Admin

  • Administrator
  • Member
  • *****
  • Posts: 1076
Land Trust, Pac Trust, Templates...
« Reply #5 on: February 26, 2003, 02:10:46 pm »
Mike,
Welcome to the board...

Of course, the smart thing to do would be to have an attorney prepare the land trust.  That said, there are few attorneys, even those who specialize in real estate, that even know what one is.  It would be a good idea to have an attorney review your document before using it.

Yes, there are templates you can get from courses, like Bill Bronchick, Lou Brown, and others that have materials on the subject.

The PacTrust, aka the Equity Holding Trust, is a device created by Bill Gatten, who joined the board not long ago.  I'm sure over time the differences between his methodologies and the standard land trust and beneficiary assignment will come to light.  

I'm not going to try and explain all the differences in full, but one essential aspect of Bill's methodology is that the seller retains an interest in the trust.  It's Bill's contention this seller retention of an interest prevents the Due on Sale clause from activation.  Another recent member, Bud Branstetter, uses Bill's methodologies for most of his purchases as well.

It's been debated at length on CREO (creonline.com) if you're interested.

Heck, for $500 per pop, I'll be happy to do your trusts for you... :banana
There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous

Offline the lmb company

  • Member
  • *
  • Posts: 3
Question
« Reply #6 on: February 26, 2003, 02:23:25 pm »
Tim and Steve:

Thanks for the quick replys.  The first I heard of a land trust was while reading a book by Peter Conti (I think that's right).  He mentioned you could have the seller assign his beneficial interest to the buyer which would primarily help with insurance issues and Due on Sale issues.  Is this basically true with a "land trust" are was he talking more of a Pactrust?

Secondly, where is best place to find info on land trust?   thanks  Mike

Offline Admin

  • Administrator
  • Member
  • *****
  • Posts: 1076
Depends on time and budget
« Reply #7 on: February 26, 2003, 02:32:22 pm »
Mike,
I bought a course on trusts (Bronchick) when I first started.  I highly recommend it.

You can search the archives at CREO, go to the library, buy Warda's book on trusts (will be on the recommended list on this site with the March update), or search other REI sites.

Hope that helps...
There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous

Offline averykc

  • Member
  • *
  • Posts: 21
Land Trusts vs. LLCs
« Reply #8 on: February 27, 2003, 10:13:45 am »
I heard second hand this week from an attorney that Land Trusts don't always hold up well in Texas courts, and that creating an LLC for each property may be safer.

Anyone here prefer LLCs and care to explain why?

I assume that LLCs will also prevent my name from being in public records, right?

Offline David Alexander

  • Author
  • Member
  • *
  • Posts: 185
    • http://www.BanditSigns.Com
Yep....
« Reply #9 on: February 27, 2003, 03:42:03 pm »
your name wouldnt personally pull up on the records...

But, your LLC would.... And if you own 3, 4, 5 props in each one...

You'd still be a target....   You'd get sued.....

They probably wouldn't win, as LLC offer good protection if handled right.

The purpose for a land trust is not for it to hold up...  (that's what the entities are for). The purpose is for it to hide ownership.... The fastest way to avoid suits is to not own anything.....

Cause, even if your protected.... You still don't want to be bothered by a suit or threats.... of suits.... No fun....

David Alexander

Offline averykc

  • Member
  • *
  • Posts: 21
So,
« Reply #10 on: February 27, 2003, 03:47:49 pm »
Are you saying that it's wise to put a land trust INSIDE an LLC?

And then you could have several trusts in one LLC instead of creating a new LLC for each new property?

Offline David Alexander

  • Author
  • Member
  • *
  • Posts: 185
    • http://www.BanditSigns.Com
I'm saying the....
« Reply #11 on: February 27, 2003, 06:03:44 pm »
beneficial interest of the trust....

should be owned by your entities, Corps,  LLC's, Partnerships and etc....

I'm saying your name or that of your entities should never show up on the tax records....

David

 




SMF 2.0.15 | SMF © 2017, Simple Machines