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Smart Investing – Taking Title in a Trust
I wanted to share with you a mistake that can squash your real estate investing business. This is a big one. This is very important – real estate investors, beginners and seasoned investors, do not take title to properties in your own personal name. And whether you know it or not, that is a no-no. It’s not good.
If you’re trying to build your empire and you’re buying all these properties in your own name and something does eventually happen down the road and there’s a lawsuit brought up against you for one reason or another and an attorney goes down to public records and looks up all the real estate that you own and they see 20 properties that you own, all in your own name, your in trouble. Well, he is just going to be rubbing his hands together, licking his chops and thinking, “Man, we’re going to get this guy good because we know everything he owns. We know all his assets.” It’s all public information.
Don’t you think it would be a lot smarter, at the very, very least to at least put these properties in one of your corporations, an LLC, a limited partnership, something like that. But even better, if you were going to hold title on properties, it would be even better if you put these properties into a land trust, a grantor trust. It’s very simple.
A land trust is something that simply holds title to property. There are two parts to a land trust. There is the warranty deed to trustee, which gets recorded, and you as the beneficiary, appoint someone as the trustee of the property. I would recommend it not be somebody with the same last name as you, it should be one of your entities, whether it’s your corporation or LLC or whatever, that should be your trustee.
And the second part of the land trust is the trust agreement, about a 12-page or so trust agreement. Yours might be more or less depending on whichever one you use. Mine’s about 12 or 13 pages. And that trust agreement does not get recorded. That trust agreement is simply the babysitting instructions for the trustee and it also tells who the beneficial interest is of the trust.
So, the trust takes title. The trust owns the property, but you or your entity owns the trust. I don’t want to get too confusing here. If you need to, go back and reread that last paragraph. But utilizing land trusts is very, very smart in your business. And if you’re not sure about doing that, contact me and I can work on helping you understand it better about land trusts or any of these other things that we’re talking about.
And it would just be very wise to not get into the habit of taking title to properties in your own name. You do not a want people to know how many assets you have. And the empire that you’re creating, you want to remain private as much as possible, because it will just help minimize potential problems down the road.
So, be wise about this. Look into using a land trust or even an entity versus putting properties into your own name.
And for the record, a side note, this can also go for the actual home that you live in. The home that I live in is not in my own name. I keep it in a land trust. So, every piece of real estate property that I own is in a land trust. It does not cost any more when you buy a property to put it into a land trust than it does to put it into your own name. All it depends on is what piece of paper you use to have that filed at the courthouse and in this case it’s a warranty deed to trustee if you’re using a land trust.
I can share with you all the information you need to take title to properties in a trust. Take a look at the following link and then accept the FREE gift and let’s get started. Go here: www.freemakemoneygift.com/Invitation.html
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