Land Trust question

General Real Estate Investing
1

I’ve been reading about using land trusts on this board (and I checked Bill Gatten’s web site) and I am intrigued about possibly using this as another tool in my investment strategy…but I have a few questions…

  1. What if the house is already included in the owner/seller’s existing living trust? Can another trust be created just for the house?

  2. If the house isnt in a trust and a living trust is created just for the house…what happens if the owner/seller later wants to create a living trust for their other assets?

(I guess the real question is, how many separate legal living trusts can one person have…or is there a way to separate the ownership interest in the house from the other assets within a trust? )

  1. I read another post in which the poster was told by his/her mortgage company to make the mortgage company a beneficiary of the trust…how would that work if using a land trust in this way (and why would you make your mortgage holder a beneficiary in your land trust? I can’t understand why that would be desirable…)

  2. Can someone explain to me the difference between the Trustee and the Beneficiary(s)? If my LLC purchases a home “sub2” using a land trust, is the LLC the Trustee, a Beneficiary, or both? If the LLC is a beneficiary, who or what is the Trustee? I guess I am in the middle of a “Who’s On First” confusion LOL [and I am really dating myself using an Abbot and Costello reference ;D ]

In case it matters, I am setting up my company (probably as an LLC) in Oklahoma (Tulsa area). Before I started reading these boards I planned only to purchase, rehab and quickly resell properties, using my own funds and hard money. However, purchasing houses using a land trust may also be a possibility.

Christine

2

  1. Since the trustee is the owner, and there can only be one owner, there can only be one trust covering a particular property.

  2. see 1.

  3. bank as beneficiary? no way! The beneficiary is “beneficial owner”. I’d NEVER give that to the bank! Make an LLC beneficiary.

  4. Trustee is owner for the benefit of the beneficary. Beneficiary is considered “beneficial owner” by IRS and is allowed to take all income and deductions on the property as if they were the actual owner. Having an LLC as beneficiary is a particularly strong setup. Usually your atty or you contract with a 3rd party company as trustee.

Third base.

3

consider the following additional references on land trust

  1. Mark Warda’s book on Land Trust (available on Amazon); he also has a website

  2. Ward Hanigan’s website www.foreclosureforum.com. Lot so discussion on land trust and their use for sub2s (also does one-on-one training for Land trust as well).

4

Thanks fro the info aak :slight_smile:

Christine