Land Trust or LLC? - Posted by Art

Real Estate Investing
1

Posted by Art Coleman on August 02, 2005 at 11:34:50:

Thanks Mike for the great reference!

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Land Trust or LLC? - Posted by Art

Posted by Art on July 31, 2005 at 12:20:01:

Hi, I’m new to this forum and would like to pose a question that has probably been posed several times before.

I created a LLC company and would like to know what kind of criteria lending institutions require in order to be able to purchase R.E. investment properties through an LLC or Land Trust.

As I am sure each lending source has its own check-offs, could someone give me little path-directing assistance?

I am a small time investor with 1 primary residence 1 secondary residence and two rentals. The primary residence will become a rental in approximately eight weeks.

My cash position is under $20,000 but my line of credit exceeds $150,000. I also have excess to investment capital from relatives and associates (one relative is an NBA player and the associates come from all sorts of backgrounds).

I have liability coverages to protect from liability claims but wish to purchase and sell property through a land trust, LLC, to lessen exposure to law suits.

I will eventually contact a R.E. attorney for advice, but thought it would be good to tap the enormous resource available on this forum.

BTW, the LLC was created as a vehicle through which an auction/ecommerce business was to be run, but now I wish to bring R.E. Investments under this entity.

Thanks for any and all help. Art Coleman

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Re: Land Trust or LLC? - Posted by Mike (Seattle WA)

Posted by Mike (Seattle WA) on July 31, 2005 at 17:49:04:

What kind of credit does your LLC currently have?

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Re: Land Trust or LLC? - Posted by Scott (UT)

Posted by Scott (UT) on July 31, 2005 at 12:42:30:

From my understanding a Land Trust is nothing more than a process of documentation. The actual Title is Vested with the Trustee of the Land Trust. Your LLC would of course make an excellent Beneficiary of that Trust. Kinda like wearing a belt and suspenders.

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Re: Land Trust or LLC? - Posted by Art Coleman

Posted by Art Coleman on August 02, 2005 at 11:03:03:

Actually I need to establish credit for the LLC so as to get away from subjecting myself to possible personal liability suits and am not quite sure how to gain credibility for the LLC.

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Re: Land Trust or LLC? - Posted by Don (VA)

Posted by Don (VA) on August 01, 2005 at 11:34:58:

That’s my understanding as well. In a Land Trust, the trustee holds both legal and equitable title. You can make the LLC a beneficiary of the trust.

It can be difficult to buy property as an LLC; more often, you’d purchase it then transfer it to your LLC. Or, in some scenarios, you don’t “purchase” it at all. The seller (with your help) creates a land trust, then adds you (or your LLC) as a co-beneficiary.

There’s some good material on this site dealing with those topics. And when you do look for a lawyer, make sure he/she is familiar with land trusts.

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Re: Land Trust or LLC? - Posted by Mike (Seattle WA)

Posted by Mike (Seattle WA) on August 02, 2005 at 11:22:10:

Goto www.creditboards.com and look at business. Be amazed :slight_smile: