Original message
| dealmaker
Moderator
  |  "Repost of DOS Clause & Land Trust."
, Sun 22 Oct 08:47: 
Below is old post from our old forum. Print out the two articles about the Due On Sale Clause and the post is about Land Trust, Closings, misc..
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http://www.legalwiz.com/dueonsale.htm
http://www.legalwiz.com/dueonsale2.htm
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The Land Trust is a simple agreement you print out that's designates the beneficiary(s) of the Trust and the Name of the Trust.
If you doing this to avoid the Due on Sale clause, you would deed the property to the name of the Land Trust. The seller will be the beneficiary for a minute until they sign the "Assignment of Beneficial Interest". This will transfer their interest in the Land Trust to your LLC or Corporation or FP, etc..
Regarding the name of the trust, we use the seller's last name and add "Family Trust" for example "Johnson Family Trust".
*NOTE: The Land Trust is kept in your possession and never filed into public record. That's the whole idea about using a Land Trust - "Privacy".
It is NOT a legal entity nor does it have any tax consequences. You can say it's a "flow through" entity. The Beneficiary entity status will determine the tax consequences. For instance if the benenficiary is my C-corp, the corporation would report the income as required.
I personally do all my own closings if I buying "subject-to" and using a Land Trust. I dealt with a mis-informed attorney and he wanted me to record the Trust into public record.
As I always say, "Learn the concept first, and details with find their place when the need arises. Don't get hung up on the details and not do any deals. We'll be here for the specifics when you need us."
Dealmaker
[this message was edited by Dealmaker on Sun 22 Oct 08:48] |
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| dealmaker
Moderator
|  "Repost of Lynn's about Trust and Closings"
, Sun 22 Oct 08:51
It is perfectly legal for a trust to hold title to a property. Many people use trusts to hold property for estate planning purposes, and this trust is basically the same. I never call it a "Land Trust" when dealing with the seller. It is actually, because of the terminology in the trust, a Revocable Living Trust, and everyone has heard of that.
I do several of these transactions each month and I have never had the seller balk on me. I explain to the seller that it is safer to deed the property into a trust to help avoid the "due on sale". Motivated sellers don't care!! Semi-motivated sellers just have to be educated.
I also do my own closings, and again I have never had a problem. I think a lot depends on the impression you make with buyers and sellers. If you are professional and they feel good about you and trust you it eliminates a lot of fear. It's not unusual for me to do the closing at a table at the grocery store! (they have a free notary service there) ;-)
I have been trying to get a very good friend of mine to get involved in real estate and I just happened to get a call from a motivated seller who had a house in the same state that me friend worked in. I didn't want the house, but I wanted my friend to see just how easy it was. He went to the guys house with about thirty-minutes of coaching from me, and he had the
guy ready to sign the deed over in about ten minutes. My friend was totally amazed, and now he is getting excited about real estate. It's soooo easy, just get out there and get started!
Lynn
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