I am trying to put together the puzzle of creating my own trust (for my whole sale flips). If anyone knows the process from start to finish (with all details) let me know. I have an LLC, so how would I interact it with the trust.
Do you register your created trust with your local courts; If so, what courts. I’m located in New York City
Thank you for responding Dave T
Other investors, gurus and REI podcasts that I listen to, have mentioned using trusts. According to them, when doing a wholesale flip, a trust provides several benefits including, privacy, avoidance of transfer tax (which many will debate) a deed is not needed, and it overall makes it easier to transfer the property. I’m not sure about any of this, but my goals are to limit all liabilities, keep my transactions private, and avoid any extra expenses (transfer tax). I believe transfer tax can be between 2 - 6 percent of the value of the house.
If you are planning to do wholesale flips, you never have to take title to the property. Just assign your purchase contract to your buyer and collect your assignment fee.
No trust (that simply confuses the seller) is needed. You get privacy and avoid personal liability because your name is never on title.
If the right to occupy the property has changed, transfer taxes are due and the due on sales clause is triggered. Trusts make it harder for the banks and tax authorities to detect that transfer. They don’t avoid the issue. Dave offers the best advice. Stay off the title.
FWIW, the federal government is pushing states to tighten up entity laws such that the beneficial interest is available to the courts, tax authorities, and law enforcement.