Land Trust--LLC--Payment to Lender and DOSC

After reading the posts that suggest putting a property into a Land Trust and then deeding the property to an LLC (for asset protection AND to avoid a Due On Sale Clause), how would you make payment to the lender? If you write the check as “XYZ, LLC” rather than in your own name the way you signed the loan, wouldn’t that raise suspicions? I’ve read that it is important to not comingle personal and LLC funds, which would suggest that the check needs to be signed as the LLC…
Thanks for your input! :o


You are just a bit off in your understanding. When you place the property into a land trust, it is deeded to your Trustee, which should always be a non-profit corp. Your trustee owns the real property. You are the beneficiary of the trust (personal property) and the trustee must act upon your direction.

You then ASSIGN a beneficiary interest in the trust to your LLC. Your LLC does not own the real property, but is considered to be the owner by the IRS for tax purposes. If you are Managing Partner, you can assign the whole 100% if you so choose. You don’t have to worry about raising suspicions with the lender. I always tell them and convert my homeowners insurance to landlord insurance once I get a tenant/beneficiary. The trust is exempt from the DOSC and they can’t do anything about it.

Da Wiz

Da Wiz:

Must the Land Trust be for a 2 year, 11 month and 29 day lease? I plan to purchase property to hold for an indefinite period. Also, how easy would it be to refinance in this scenario?

Thank you for your input,


You can make the land trust 20 years if you want. Understand that you don’t have to combine the land trust with a triple net lease. I do it that way because I find it to be the easiest. However, once you have acquired the property you can set up a land contract, WRAP, etc., it’s your choice. That’s why I like its flexibility. When it is time to refi, unless your lender allows you to refi as an LLC, you are usually required to dismiss the trust, refi, then reinstate the trust. I have done this several times. Good luck,

Da Wiz