Timing Of Placing Property Into A Land Trust
I am a newbie investor and purchasing investment property to hold for renting out. I want to place these properties as I buy them into a land trust but I'm told that you must put them in your name first then quit claim then into a land trust. Is that right? From the books it sounds like you can assign the title directly into a land trust. I am doing this for anonymity and as I will have multiple properties I plan on having one land trust per property. Appreciate any help
Also, does anyone know the name of the act that made it where lenders cannot call the due on sale clause when placing something into a land trust? I thought it was the GBFR act but I can't find anything.
Ray :-?
There are not many banks willing to lend directly to a trust. You certainly can take title directly to a trust if you are not dealing with a bank.
I would recommend using a WARRANTY deed over a quit claim deed.
Ray, there is no act. Lender can call a loan due anytime they feel like it. As you said in your post, anonymity is the key. A land trust hides the sale of a property from lenders. If you're paying the notes on time you shouldn't have any problems.
My question is, does the land trust send a red flag to lenders? I am sure they are aware of investors practices.
Myfrogger, why would you use a warranty deed instead of a quit claim?
I believe that you are looking for the "Garn St. Germain" Act (Please pardon me if I spelled it incorrectly).
The reason that the warranty deed is better is that the seller "Warrants" the deed to be "As represented" and that there are no other owners or individuals that could lay claim to the property.
The quit claim does not indicate that they ore the only ones on the existing deed. It simply states that they are transferring their ownership of the property to you.
If you are placing the title into the land trust for anonymity reasons, then you do not want to take posession of the property personally. If you take posession personally, your name shown up in the chain of title. No anonymity there.
You could help the sellers establish the trust, and then transfer beneficial interest of the trust to you. This will give you the anonymity you desire.
Jeff[ Edited by jeff12002 on Date 07/12/2004 ]
That is the act I was talking about, thank you. I would not have myself as the trustee so I assume there would at least be some anonymity, should I wait a few months then place it into the trust?
How could I just place the land into an LLC and then later into a trust? Any suggestions?
I dont set up the trust where they assign their beneficial interests over to me because it confuses the heck out of them. I just simply have them deed it right into the trust using my trustee. Then later on that same day or the next, I fill out the trust agreement.
stangboy041376, I like your method and have often wondered how to change my Land Trust paperwork.
I use Mark Warda FL Land Trust documents. Unfortunately his documents have the Trust documents specifically meantion the property. I know that Land Trust can be set up to hold multiple properties or other real estate related items. But his documents are written to be set up with a specific property. So the Land Trust has to be signed by the clients (home owners) for the trust to be created.
It would be better to set up a general Land Trust and just have the clients deed their property to the Land Trust. Less work for them and less explaining for us. Unfortunately I do not know how to change the paperwork that I have.
The sellers should not have anything to do with the trust agreement at all. As soon as they deed the property into the trust, they are done, they dont need to see, hear, or have anything to do with the agreement. It doesnt get filed anywhere and the only ones who have access to it are you and your trustee. Also you can have many properties in 1 trust, but I recommend using a trust for each property you buy.
what privacy protection are people concerned about by using a trust?