http://www.realestateforprofit.com/blog/Landtrust Blogen-usSat, 08 Nov 2008 11:53:46 EST http://www.realestateforprofit.com/blog/comments.aspx?b=49 In Don Felder's new book, Heaven and Hell..My Life With the Eagles he talks about an out-of-control fan who he calls Psycho Santa. This fan wanted Don's autograph so badly that he looked up all the property that Don owned in California and went to each property until he found Don's personal residence. This obviously freaked out Don and his entire family and made them fear for their lives. How could he have prevented this from happening? You guessed it! The Land Trust. If Don would have (and he still could) placed each of his properties into separate land trusts (designating Trustees with different last names from his) he could have avoided being listed in the county records as owner . Don's stalker/fan (Psycho Santa) would have never found him (at least not through the county records method of investigation). The world is getting crazier by the day. Why risk you and your family's security any longer? Get with it out there, folks! Start using Land Trusts and you will sleep better at night. Maybe the rest of the members of the Eagles Band should take note here. Randy Hughes http://www.realestateforprofit.com/blog/comments.aspx?b=49 Sat, 27 Sep 2008 12:00:00 EST http://www.realestateforprofit.com/blog/comments.aspx?b=48 There are nearly 100 million lawsuits filed every year in the United States. Landlords are probably the single most sued classification because of the misconception that all landlords are RICH! Another reason why landlords are such an easy target is the fact that it is so easy to find out what they own. If you were going to sue someone, wouldn't it make sense to investigate the potential assets of the person you are going to sue first? Most landlords/property owners walk around with a big target on their back because almost all of their hard assets can be discovered by a simple computer search of the local county records. You (or your attorney) do not even have to leave the comfort of your home or office to find out every piece of property that a landlord owns. Why? Because most landlords/property owners hold title to their assets in the own personal names! This is like walking around with a financial statement imprinted on the back of your shirt! Once your assets are known it is not hard to estimate the lawsuit satisfying equity. Let us take an example of why you should NOT hold title to real property in your name or jointly with others. Case-in-point: A few years ago I sold out of a real estate investment and took a note back for part of the proceeds. The buyer defaulted on the note and I took him to court. After winning a judgment against the buyer I recorded a memorandum of judgment in the county where I knew he owned property (how do you think I found out what he owned?). The memorandum filing was like putting a blanket over everything he owned in his name or with others. He could not make a move without dealing with me first. As luck (mine not his) would have it, I received a call from a local title insurance company that was trying to close the sale of a property. The problem was that my judgment was a cloud on the title. As it turned out, the man I had a judgment against owned a property jointly with his daughter. The daughter was trying to sell but could not because of her dad's judgment to me. After some conversation, I agreed to release my judgment (on that property only) in exchange for ALL of the daughter's equity. This allowed the sale to go through but did not provide any equity to the daughter. I suspect that dad and daughter had a very uncomfortable conversation after closing. The point here is that if the dad had just put all of his (and his daughter's) real estate holdings into separate land trusts, it would have allowed the sale to go through without my knowledge! This example is just one of a huge number of reasons to use a land trusts in all that you do with real property. Randy Hughes http://www.realestateforprofit.com/blog/comments.aspx?b=48 Sun, 24 Aug 2008 12:00:00 EST http://www.realestateforprofit.com/blog/comments.aspx?b=47 There are a lot of bloggers out in internet land talking about using Land Trusts to avoid seasoning requirements and accomplish double closings. Here is a real life case study you can learn from and use for your own double-deals. In May I was contacted thru email by a seller in distress. The seller and his wife saw my we buy houses FAST insert on the bottom of one of my FOR RENT signs and went to my seller's website to submit their house information. Once I received their email outlining their situation I called them to make an appointment to see their home. The sellers were in the process of moving out and leaving the house behind. They had already missed their first house payment and had stopped paying their homeowner's insurance premiums. I called their lender with them at the kitchen table. We were put thru to the short sales department and were told to submit various documents for consideration of a less than full loan payoff. After a month of phone calls and paperwork we closed the deal. Here's the rub. The buyer under my contract to acquire this property was my Land Trustee . Prior to closing I came to an agreement with a third party buyer who wanted the house to rehab. At closing I assigned my beneficial interest in my Land Trust to the third party buyer and HE closed the deal. This prevented me from having to close the deal myself (and incur closing costs) and then re-selling to my new buyer. Therefore, my net profit was the same as my gross profit. This method of using a Land Trust also prevented the lender from objecting to the deal as the buyer (the Land Trustee) remained the same throughout the transaction. If you want to do these kind of double-deals, be sure to use a Land Trust for maximum profit and efficiency. Randy Hughes http://www.realestateforprofit.com/blog/comments.aspx?b=47 Sun, 03 Aug 2008 12:00:00 EST http://www.realestateforprofit.com/blog/comments.aspx?b=46 We all know that Illinois is the Granddaddy of Land Trust law. There is over 100 years of case law on the Illinois books supporting the validity of using a Land Trust to hold title to your real estate (and real estate related assets). However, because Illinois is ahead of the curve with their land trust laws, the benefits of using a Land Trust can be limited in Illinois. Case-in-point: One of the biggest reasons why people began using Land Trusts in Illinois was to avoid the Transfer Tax. By transferring the beneficial interest in the trust and not the title holders name (the Trustee), a seller was able to avoid paying Transfer Taxes AND the buyer avoided a reassessment due to the title change. Illinois got smart to this ploy and in 1986 passed a law (765 ILCS 420/3) requiring Trustees to notify the taxing bodies if a transfer of beneficial interest occurred within the trust. However, there was a loop hole. The actual statute reads that this requirement holds true for all Land Trusts, ....other than trust documents relating to land situated in counties with a population of 2,000,000 or less..... Obviously, the Illinois legislature was thinking (as they usually do) that Cook County (the county in which Chicago is located) is the only county in Illinois. I suspect that Cook County is the only county in Illinois that has a population in excess of 2,000,000! Note: If the Trustee fails to comply with the requirement, he will be PERSONALLY liable for the unpaid tax. Randy Hughes http://www.realestateforprofit.com/blog/comments.aspx?b=46 Mon, 28 Jul 2008 12:00:00 EST http://www.realestateforprofit.com/blog/comments.aspx?b=45 A new law was recently introduced by Senator Barak Obama and it is known as the Incorporation Transparency and Law Enforcement Assistance Act . The purpose of this proposed law is to help law enforcement stop the misuse of U.S. corporations. How will it do this? By requiring states to gather and report (to the Feds) information on the beneficial owners of all domestic entities. What is a domestic entity? At this writing it appears that only corporations and limited liability companies are the target. While most states now require disclosure of the owners of these types of entities it is unclear how far the feds (via the states as their surrogate) will take this. For example, what if the Member of an LLC is the Trustee of a Personal Property Trust? Will the feds require disclosure of the beneficiary of the Trust? We think not. Trusts have been privacy tools for all citizens (including politicians) for over 100 years in our country. It is our opinion that Land Trusts will not be affected by this new law. Once again, our advice to put each of your properties into separate Land Trusts will hold true. Then, make the beneficiary of your Land Trust your corporation, LLC or personal property trust. If this new proposed law is passed, and your entity is affected...just use nominees for beneficial owners and you will remain anonymous! Randy Hughes http://www.realestateforprofit.com/blog/comments.aspx?b=45 Sun, 29 Jun 2008 12:00:00 EST