Well-informed real estate investors are aware that a land trust can be a very helpful tool to use. Land trusts are living trusts that are revocable. They are specifically used to hold the title on real estate. Each property should have a separate trust that holds title to that property only, to allow for the maximum amount of privacy and protection. There are several reasons why real estate investors like land trust.
The first reason is for privacy purposes. Today information is so easily acquired that anybody who has access to the internet can research your ownership of real estate. Having privacy is sometimes very important to investors especially if they do not want everyone to know how much or how little they own.
If an investor lives in a city with extremely strict code enforcements, owning multiple properties in their own name can land them a court date regarding them having too many violations, because all the infractions at all the properties are listed in their name. A land trust makes it harder for city code enforcers to identify the underlying owner, saving the investor from having to deal with court.
Another reason a land trust can be a good thing is because when they are set up properly, any liens against the property cannot attach to the trust’s beneficiary.
When selling the property, having protection from unknown title problems can be a big deal. If a warranty deed is signed by the investor, in their own name, they may be subject to potential title claims if any kind of title problem arises with the property in the future. If a lien was filed that the investor was unaware of, the liability can still be against them personally regardless of whether or not title insurance was purchased by the new owner. Land trusts will protect the investor against multiple types of title claims limiting the claims to the trust.
It is a common practice for people to only sue individuals who they think has money. If an investor makes their properties hard to find it gives them the appearance of being someone with not that much money and who is not worth suing. Regardless of whether or not the person suing believes that you have a lot of property, the litigation against you will be discouraged because the process of finding the assets and linking them to you will be too hard.
Land trusts also provide protection from aggressive homeowner’s associations. If the title is taken in the name of the land trust, instead of the investor, the property and the trust are typically the only resources for the homeowner’s association to file a claim against.
Also, when using a land trust, the trust’s beneficiary can be transferred without having to change the title to the property. This can be extremely helpful when the mortgage on the house is not assumable.
Lease Purchase Agreement For Real Estate 