Posted by Brad Watson on April 19, 1999 at 22:08:26:
Not a chance, Bud. worst case I can take a partner and use his name, it will just take me a little longer to get this taken care of. How effective will a corporation be? This is a state tax lien and a private corporate judgement from about 6 years ago. i sincerely appreciate all the help, folks. Have a great day,
Brad
Poor credit question - Posted by Brad Watson
Posted by Brad Watson on April 18, 1999 at 14:51:52:
I currently have a tax lien, as well as a judgement from about 7 years ago on my credit. Being a new REI, obviously I need to keep my names off any titles intially, until I can get these cleared up. My question regards Incorporating or Land trusts.
Which will be the most effective (and unattachable) method? Also, how do you go about setting up a land trust legally?
Any info appreciated. I am one newbie who appreciates the pros on this board, even the folks who arent sure, just trying to help. I have a newfound sense of purpose, and nothing, including poor credit will stop me!
God bless,
Brad Watson
Re: Poor credit question - Posted by Bud Branstetter
Posted by Bud Branstetter on April 18, 1999 at 21:34:27:
The tax lien people are unlikely to come after you. The judgement creditor has not either. However that does not mean that he could not order a post judgement inerogative to find out what you own. At that point you would have to divulge that you owned a corporation or an interest in a land trust. Either one can then be made to satisfy the judgement creditor. Only with a limited parnership entity can you have more protection. They can only get a charging order but can not force the sale.
One thought would be to let it lie until the statute of limitation runs out(10 years most places). Another thought would be to have a third party innoculessly try to buy the judgement for pennys on the dollar.
Re: Poor credit question - Posted by Brad Watson
Posted by Brad Watson on April 18, 1999 at 21:23:41:
thanks for the insight, guys, I will decide this week what is the best avenue so I can get on the offer trail. Thanks again and good hunting,
Brad
Re: Poor credit question - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on April 18, 1999 at 21:02:06:
Brad,
Keep that attitude. It will take you far.
Land trusts, properly created, are highly effective in hiding your beneficial interest in properties. In fact, your beneficial interest in a trust can only be revealed by your trustee through a court order. This makes it highly unlikely that anyone will know of your personal involvement with a “trusted” property. In addition, if your trustee is out-of-state, that adds another layer of complexity to the discovery. However, it is not impossible to find you in a trust and attach your property, just difficult.
Regarding incorporating, I wouldn’t be in this business without setting up SOME entity to hold my properties. I don’t know if the properties you acquire in your new corporation can be attached to pay your past lien and judgment, but I certainly wouldn’t operate without the personal protection they provide in any event.
Bill Gatten offers a course called PACTrust. And, Bill Bronchick has a course on land trusts and creating corporations and limited liability companies. I’ve heard good things about all of these materials.
I hope this helps.
Bill K. (AZ)
Re: Poor credit question - Posted by Preston
Posted by Preston on April 18, 1999 at 16:50:31:
In Ron LeGrand’s courses on Seller Financing and Lease/Options, he has a tape and forms completely explaining Land Trusts. In the tape, he interviews an attorney who specializes in Land Trusts. I think it would definately help you to buy one of these the courses for this information plus the rest of the material in the courses is great.
Re: Poor credit question - Posted by Brad Watson
Posted by Brad Watson on April 18, 1999 at 21:43:50:
Thanks for the help, Bud. My main question has been if I purchase a property for rehab, resale, etc, if my name goes on the title will the lien or judgement transfer to where I cannot sell the RE? In leGrand’s Quick-Turn book, he makes reference to the judgement transferring. This would definitely be a bummer in wholesale. Once I can turn a few properties, I can take care of this properly. Thanks for the info,
Brad
Re: Poor credit question - Posted by Bud Branstetter
Posted by Bud Branstetter on April 18, 1999 at 22:53:50:
A property tax lien will stay with a property. Federal, state liens can go with you. So will the judgement. This means that if you try to buy something in your name with a mortgage that it is unlikely that the mortgagee can get title insurance so they will not do a loan to you. If you buy in the name of a land trust many title companies want to see, and check the beneficiaries before giving title insurance on the sale. You can get by this by naming the wife as the beneficiary. Many people also operate successfully from a corporation. While your situation may be an impediment you can still do L/O, and flips without a hassle. Don’t let it be an excuse.