Should You Use A Land Trust Or LLC To Purchase Real Estate?
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- Опубликовано: 8 июл 2024
- Should you use a land trust or LLC to purchase real estate? The answer may surprise you as we go over the benefits both options offer prospective investors in the world of real estate.
“At the end, I’m going to show you what I think is my preference when it comes to buying real estate. It’s based upon 25 years of investing experience in my own investing and those of my clients.” 0:21
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You have to realize that when it comes to real estate, there’s no one-size-fits-all answer. You have to look at your particular situation and see what makes the most sense for your particular situation.
Land trusts are typically used by people who need to protect their land from creditors or other parties, while LLCs are usually used by real estate investors. However, the decision to go with one or the other depends on the person.
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Until next time, good luck with your endeavors, and have a great holiday season.
Show Notes:
0:00 Intro
0:09 Land Trust
3:18 LLC
7:07 Land Trust vs LLC
9:18 Outro
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Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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#landtrust #llc #realestateinvesting
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Can you use both?
This is so good, Clint! 💪 ... We have actually been trying to close a deal we are selling out of our land trust that is taking FOREVER ⏳ because the title company/closing attorneys on the other side of the transaction don't really understand how they work, which bogs everything down and creates a lot of unnecessary paperwork they feel they need to be protected ... At the end of the day, I'm convinced at this point that the benefits far outweigh the negatives, at the same time, you make great points about LLCs and why they can be beneficial! ✅ ... Again, GREAT breakdown here Clint!
So, to clarify, in Florida, I would put a house (no mortgage) into a land trust, with an out-of-state LLC as beneficiary, and another LLC as trustee, for anonymity? I intend to rent it out.
Thank you
These videos are awesome. Clear, concise, helpful, friendly presentation. AND IS an investor himself so knows how to apply it and speaking from experience. I'm hooked. Would love to hear about Irrevocable trusts
Glad you like them! I will add it to the list of topics
Good info, Clint!
Glad you think so!
Also due on sale clause on mortgages requires a land trust , not an LLC
So by reading the comments, I’m gathering exactly what my thoughts were. Combine the two??? Put everything in a trust. Have an LLC as the beneficiary.
What I am currently speaking to learn is - why are my investor friends putting the land in “holdings” and then the building that sits on that land in an LLC. I’m told it’s protection… I’m seeking that structured knowledge. I need to share more beers with them lol.
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In Florida land trust, the trustee and the beneficiary get asset protection from inside the Land trust.
Correct
Is an LLC still the best option with the new BOI reporting requirement in mind? Especially if you don't want your personal name in the public eye on your own home. (i.e. In the case of just your first home, or a multifamily that you occupy as the owner)?
Thanks for the great content!
What if you're in Florida where land trusts provide inside asset protection? Is there a downside to using land trusts there coupled with a Wyoming holding company?
Not that I know of
What if I want to change the trustee? Will the deed trigger a sale and therefore taxes? Or via quit claim deed and no tax liability generated.
Hi Clint, love the videos! If an existing property is in a Land Trust and you purchase it while keeping the existing trust (only change of Beneficial interest)… do you pay real estate excise taxes? How would a deal like that be structured? Maybe a video on this would be good 👍🏻. Thanks!
I will put together a video on this. Make sure you are subscribed so you will receive notice when it is posted.
if you purchase the property under a land trust, any redemption rights are lost-that is, the right to reclaim the property just before (or after) foreclosure. Second, most land trusts are automatically disqualified from secondary market loans.
A lender suggested closing the property loan in my name vs an LLC since the LLC is less than 3yrs old without tax returns. Would you suggest doing a quit claim to transfer the title into an LLC or set up a Land Trust after closing?
See my other answer.
Can I close in the land trust and assign the beneficial interest to LLC afterward so I can get anonymity and asset protection? Thanks
Yes you can
Hi Clint, does the Land Trust you mention to help with moving rental property a valid strategy in state of Washington?
Yes it does.
Clint, thanks for all your amazing videos. I have a 1031 question. I am thinking of selling my rental bought with a 1031 exchange. There is a $40,000 tax liability. If we finance the new owners with a 20 year note, how is that capital gains payed?
The 1031 deferred gain is recognized immediately.
What about primary residence property tax exemption. If i havr it under a trust can i claim that?
Yes if it is set up properly.
Is it practical to set up both a Land Trust AND a LLC for different investing strategies? (i.e., as you just explained about auctions & sub-to vs standard purchase deals?
Yeah, I was thinking the same thing. Close it in an LT and assign it to the LLC. Based on what he is saying it makes it easier to get loans down the road if need be, transfer ownership, and provide asset protection. Other than the cost I wonder what the downfall would be.
Absolutely. I will be posting a new video in the coming weeks on subject-to investing using land trusts. The trust is also beneficial for traditional purchases as well.
@@ClintCoons this video, tripped me up a bit. I am private financing investment land from my parents. I thought it would be best to set up a land trust and name the LLC as beneficiary. Should I just put the land directly into the LLC?
@@thebeasyband9425 If the land is not subject to a mortgage then you can use a WY LLC to hold the property.
@@ClintCoons and that’s it? No trust, or NY LLC? I can open a Wyoming LLC to hold the property, and still operate a short term rental on the property as property manager?
So its situational basically.
Question: If I take title in the trust's name, can ownership be transferred to an llc at a later time and if so is it a difficult process??
Not an issue. Why not leave it in the trust and put the trust in the LLC?
@@ClintCoons Ahh, I see... thank you.
So create a Land Trust and put LLC as beneficiary?
Yes
whats the difference between having a holding company then under a LLC and add everything to the land trust of family trust?
The holding company provides asset protection. If all you have are land trusts then a lawsuit could wipe it all out.
I'm new at this- I saw a video that said if you own property in a LT and then sell it, the LT is extinguished and then any legal recourse against the LT is almost impossible since it no longer exists. True?
You can sue the beneficiaries of the LT who benefited from the sale so I don't fiully agree with the statement.
@@ClintCoons😊
Do you offer any service where we could pay you for an hour over the phone? Or even 30 mins? My wife and I are in the process of purchasing a rental property in SWF Florida, where our home is, and the lender states that she always does land trusts. Now I'm curious as to why not LLC. We would compensate you for your time.
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If it’s a personal residence and my main goal is anonymity what’s best? State: NV
I would use WY
Hey! Im confused and need help. Im a first time home buyer. Im not trying to do rentals just trying to put my personal home on a LLC. Do i have to pay taxes of its not bringing in any income?? Cause the im just trying to protect my home by using a LLC what tax routes do i need to take for setting up my llc for my personal home??
First I would use a residence trust and not an LLC for your residence but if you go with the LLC then you will not pay tax on its transfer. The house does not generate income so you have no income from it being placed in an LLC. You may have a transfer tax or reassessment depending on the state so check with a professional before doing this.
@@ClintCoons sounds good, ill do some research on a residence trust. thanks clint!
@@ClintCoonsI thought you said a land trust doesn’t provide asset protection
Is there a income requirement for a land trust
Not at all
@@ClintCoons thank you
Can I run LLC's off the Land Trust and what do you think the pros and cons are?
Yes I think you should use LLCs as the beneficiaries of your land trusts. Without them, you risk personal liability to any claims brought against the land trust.
How do I do A land trust?
i plan on holding this non incme producuing farm so an LLC would not look real to the IRS after awhile....yet l need to section 179 some equipt.i have another roofing LLC and 179 equpt.is unrelated dirt equipt!....as for liablity protection, insurance may be cheap on vacant grround...im Corn-fused.I have other farms simply in my wifes and my name.no LLC....I NEED TO sit down with an attorney so l dont get broad youtube advice but more specific.
I agree. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
What if the property is on a land trust but only the house is for sale, not the land
Are you buying the house from a land trust and leasing the land?
@@ClintCoons from the house listing I was looking at, "This home is being sold as a Land Trust which means the trust will hold the land and the home will be owned by buyer."
@@elizabethnelles6170 That is correct. Can you send me the listing? I would like to see how the property is being listed.
CLINT Awesome how Always because he go direct to the Point.😉💯 Well, for me is the choose the Land Trust if YOU is make the fast SELL or how to Speak Clint you Buy In Auction and do you Like Sell i less the One Year, in fact in FEW Months, But if You is the Owner of the RENTAL Property i think is better you go to the Land Trust and the LLC for this, One LLC for the Trustee and Other for the Benficiary.🙄🤔
Melhores Produtos
Thanks for watching.
So basically you can use the land trust to run the LLC
The reverse
Why not buy in land trust. Create pocket deed… just in case
You can definitely use this strategy
Just a little constructive criticism, it’s hard to read your hand writing.
Use show transcript at the end of the page,. can help you.
@@gb8518 what does that even mean?
@@xploration1437 bruh, click on the description and scroll down until you see "show transcript" at the bottom.
@@dixielandcrew7 or he could just write legibly…
@@xploration1437 or you could stop bitching and crying and figure out a solution since the video is already made and he isn't going to answer your question l.