My team and I will be using Land Trusts to wholesale properties. how much does it cost in attorney fees to set up a land trust? and sell a land trust? I was quoted $5000-$7000 to handle all the paper work. They give us a land trust worksheet that we fill out with the necessary info to draw up the contracts (front end and back end). and from there they handle the rest all the way to closing (with our end buyers).
What do you guys think about the price?
Charles
I think you can make more if you did more of the deal. I’m not even sure why you need a land trust at all.
Looks like you are about to be sheared. Your question about selling a land trust indicates you don’t really know what a land trust is or its appropriate uses. There are a number of reputable places you can go to learn about land trusts for substantially less than you appear willing to pay.
I know several successful investors who have taken Ward Hanigan’s Title Holding Trust training, in San Diego, and can’t speak highly enough about it. (And no, I’m not Ward Hanigan and have absolutely no association with him.) You can Google him on your own. Always ask for references.
I have taken Bill Gatten’s Pac Trust course and found him laughably unprofessional. In my view, his course is a complete waste of time designed to do nothing more than to up-sell you to his next level of vague advice.
In many cases you don’t need a trust and probably shouldn’t use one. If you believe you have an appropriate use however, the paperwork shouldn’t take you more than a few minutes to create the trust. Anyone who tells you that you have to fill out a worksheet is trying to hide behind some sort of perceived mystique you seem to have, and keep you uninformed.
Hey Equity,
… “Ward Hanigan’s Title Holding Trust training”. Does he offer a program? I’ll do some checking on the Inet while I await a reply, but I did find Bill Gatten’s program and books very helpful, so I’m curious to see how much more elucidative this other program would be.
What I’d really like to find is the “definitive text” on RE Land Trusts, kind of like Sheldon Natenberg’s “Option Volatility and Pricing, Advanced Trading Strategies and Techniques”. There isn’t anything I need to know about option trading that isn’t in that book. I’d like to find the same for RE Trusts.
There is no mystique or an attempt to keep you uniformed. They take the information from the worksheet and plug into trust document generator.
Hi BLL,
We both know that it probably takes 15 minutes to create the trust, using either trust generator software or just filling in the blanks on a Word document. Paying someone $5000-$7000 for this is a bit over the top. I know we’ll agree that it’s more important that you know the appropriate use of the trust.
obiwan1250,
The more reputable courses will actually try to educate you. They’ll explain the proper use of a trust, including legal issues, and provide you with the documents as well as show you how to use them. I know Ward Hanigan does this. Bill Gatten does not.
Gatten’s 3/8” handout has 3 pages on the use of his trust in block diagram form only, and no details beyond that. The rest are extremely convoluted explanations about how to use the trust to transfer title between various co-beneficiaries, various dubious tax strategies, how to use it to evict people, how to sidestep the due-on-sale clause, etc. – all with a “give me $6000 more and I’ll really explain the details,” qualifier. Does any of this smell?
In its simplest form, a land trust merely provides temporary privacy. Most RE investors I know use it to mask their ownership in a property from the prying eyes of anyone doing a cursory asset search on them. The theory is that an attorney is less likely to pursue you if he sees you don’t own much. In fact, with a little more work, a diligent attorney can easily determine what you own. The hope is that he won’t be diligent.
You can try to use a land trust to evict tenants or evade the DOSC, as Gatten advocates, but I think you’re playing with fire. Personally, I’d use the $5000-$7000 to rehab a kitchen and actually add value to a property.
I do agree that the price is outrageous for an auto-generated, cookie-cutter agreement. The OP did say that the company would handle the transaction and that’s why I said he was leaving too much on the table (instead of saying the price was too high as I don’t know exactly what they provide). IMO, he can do the work himself and pay only for trust document preparation. (I still don’t see how a trust would be useful here, but that is another discussion.) If he had said they wanted the 5-7K just to draft the document, I would have called it a rip off and scam.
Gatten’s Pac Trust requires the investor to be a licensed RE agent in OH and I suspect every state will come to the same conclusion if/when cases are heard in the those states.
Attorneys sue first and do the asset search later. Seeing land trusts and LLCs actually makes them think there is more assets to be had and there are actually seminars for creditors where t hey learn to pierce entities and force a settlement on their terms. However, the vast majority of cases settle for the insurance limits, making most asset protection plans unnecessary.