Who Does The Tenant Pay? LLC, Land Trust, Trustee, Etc
Say I've setup and LLC and have my properties deeded to a land trust and the LLC is the beneficiary (I think that is the way its supposed to be done). My bank account is in the name of the LLC.
who does the tenant write the check to?
if there are any LLC protection ramifications or other quirks please comment.
Nothanks:
Nice to meet you!
I am a little lost as to exactly what you wish to accomplish regarding the Tenant ot Tenant-Buyer will be paying the Land Trust or Your LLC???
Is it a standard rental agreemet tenant/leasee?
or
Are you offering the Tenant:
An Option to Buy?
Equity build up?
Tax Benefits?
etc.
When I set up Trust Deals I use the services of a 3rd Party Corp. Trustee plus arrange for payments to be collected by a Loan Servicing Company.
The above method helps keep things orderly, professional and Arms-Length to cover my A$$ets regardings taxes, legal issues and other "un-toward actions" as my good friend and Mentor Bill Gatten always says!
Let us know both what your intentions are as well as goals to beter help you grasp ideal ways to get PAID using this landtrust title-holding arrangement.
Happy Investing!
Derrick Ali :-D
How will
I've formed a single member llc where I am the sole member/manager and opened a checking account in the name of the LLC.
I own a house in my own name with a mortgage in my name which I plan to rent/lease to a section 8 tenant.
I want to transfer the house to the LLC to protect my personal assets from liability. I have read here and elsewhere that the best way to accomplish this without raising suspision with the mortgage company is to transfer title to a Land Trust and then change the beneficiary of the Land Trust to the LLC. Please correct any misunderstanding that I may have.
From your email I gather that I should hire a 3rd party company to be the trustee of the Land Trust rather than myself or a relative. True? Why?
Once this is complete and a tenant is in the house who do they write the rent check to? Land Trust, LLC, other.
If it is Land Trust or other how do I transfer the money to the bank account in the name of my LLC? Who indorses the check for the Land Trust?
I guess, what is the path of the money back to me.
Nothanks:
You'd be heading for some problems with Sect 8 regarding payment to the Trust.
I could be wrong however I believe Sect 8 doesn't like (or accept) LandTrusts as Landlords. Check into this...
Better try it using just the LLC inquire with a local ATTY about transferring title to the LLC. The banks shouldn't be too concerned as long as payments are timely.
Steps should be:
1 - Review with knowlegeable ATTY
2 - Warranty Deed Titled to the LLC
3 - Notify Bank
4 -SECT 8 Tenant to Pay the LLC. BK Acct.
5 - SPEND YOUR DOUGH!!!
Yeah Baby!!!
Happy Investing,
Derrick Ali :-D
Derick sure could be right, so do call Sec.8 office and find out who they would accept as payee:
Ask them this: if you hire a Trust to be the property mgr, would they be willing to send their part of the rent to that name?
It'd be very simple matter to write up a contract hiring a trust to be the rental mgr if that's OK with Sec.8.
I have had Section 8 tenants in some of my properties over the years. In my area, I use a professional property management company.
The tenant signs a lease with the management company, pays their rent share to the management company. The housing authority pays their rent share to the management company.
If your beneficiary LLC, within the language of the trust, reserves the powers to operate and manage the property and to retain the income from rental operations, what is the difference between your LLC manager and my professional property manager?
Most banks want to deposit checks that are in the same name as on the account. So if you account is in the name of the LLC, they will want checks to be written to LLC.
The tenants should make their checks payable to the trustee. They may put "c/o bob's land trust"
The trustee distributes the funds to the beneficiaries as he has been directed to do so.
The LLC recieves the funds. Any left over (net profit) can be distributed to you.
The Trust does not have a separate entity for tax purposes. It simply brings money in and sends money out.