I was wondering if it is possible to buy properties initially in your name since you have good credit / assets. Then sell the property to your own corporation via a land trust deal (keeping the sell from the lender). This frees you back up to do more deals in your name and builds your corporate entity until it has enough asstes to do deals in its own behalf.
Is this possible / ethical??
How is keeping the sale from lender ethical? How does the corporation buy the property if it has problems securing financing on its own? It would be wiser to buy in the name of the corporation with a personal guarantee.
You did bring up an interesting point. An arms length sale between you and the corporation will defeat any fraudulent transfer/conveyance issues.
It probably won’t free you up because the mortgage will still be in your name - in most cases. If the mortgage doesn’t get removed from your name, then you have the worst of all worlds - you have a mortgage payment in your name, but no property ownership to show offsetting rental income. Or DTI Ratio goes ballistic.
It is possible to do this, but from a financial aspect it is tricky to do, and if you do it wrong then you are screwed.
This is a basic concept that many just don’t understand. Getting properties into the ownership of LLCs or S/C Corps is an asset protection method in case you are sued from a liability standpoint. In almost all cases, using any form of corporation for financing reasons or to avoid foreclosure/bankruptcy is wasted time and effort at best - disaster at worst.
Before you decide to do something like this, consult with a good CPA and real estate attorney who knows your state’s laws concerning this.
first, you don’t “sell” property to a land trust. you transfer it. In TX the bank cannot object to such a transfer for estate planning purposes.
An arms length sale between you and the corporation will defeat any fraudulent transfer/conveyance issues.
true, but so does simply notifying the lender that you are transferring the property to an entity. A sale, especially with a mortgage, will probably not be legally binding on the lender without consent anyway. And I can think of a few ways that it might muck up your taxes, too.