Commercial Real Estate Broker · Fontana, CA · Member since 2008 · 68 posts · 20 votes
I just flipped 3 properties today to a all cash investor using a land trust. I had never done it before and I was skeptical but I closed all three deals same buyer within 3 hours.
Here are the steps if you want to use a Land Trust to flip:
1. Put in your offer as xyz title vesting tba in escrow.
2. Get offer accepted.
3. "Street Name" Land Trust Trustee xyz (whatever buyer that is in Step One)
4. Find a cash buyer
5. Sell your land trust to Cash investor ( Wholesale Fee)
6. Cash Investor is the 100% beneficary
7. He wires money to escrow.
8. Property sold
9. Beneficiary (Cash Investor) fires xyz as trustee and assigns his own trustee for property.
NO EXTRA COST FOR A DOUBLE CLOSE USING TWO ESCROWS
Real Estate Broker · Fort Myers, FL · Member since 2008 · 1k+ posts · 323 votes
16y
There are a few ways to do that. In an LLC you just fund the LLC. Or show personal funds with a letter stating that you will fund this purchase with personal funds. (not all banks will accept this, some want the buyer, escrow check and verfications of funds letter to have the same vesting)
When you show the personal funds as part of the POF landtrust. You lose the key ablility of the landtrust. The ablity to remane unkown and do business.
This thread is much like the whole REI industry. Hyped up simple information, sold to people with no working knowledge.
There are no secrets in real estate, there sure are no secrets for sale in real estate.
Those than can do. Those that cant GURU.
You have 4 things you need to succeed in this game.
time
money
knowledge
a good credit rating
without those you are pretty crippled in what you can do. The good news. Those fours things can be aquired with a little effort.
Real Estate Investor · San Bernardino, CA · Member since 2008 · 9 posts · 5 votes
17y
I agree, I have used this method myself, it is very effective when dealing with REOs (no assignment clause). You assign your beneficial interest in the land trust to the end buyer in exchange for your fee. Once the deal closes you resign as Trustee. In addition to the cost savings Anthony mentioned, the property gets recorded as "Street Name Land Trust" not the end buyers name.
Rental Property Investor · Mobile, AL · Member since 2009 · 8 posts · 1 vote
17y
This site is amazing. I totally admit that all my experience has only come from the very conservative side of Real Estate. I have learned so much in 1 week, that I am almost overwhelmed! Thank you all so much for sharing your knowledge here. Even though I have been a licensed Agent for over 8 years, I am very much a Newbie to Creative Investment, and I want to learn as much as possible!
Real Estate Investor · Fontana, CA · Member since 2009 · 36 posts · 4 votes
17y
Anthony,
How and where do you actually set up the land trust? Does it need to be filed with the city, county, state etc.? Does it need to be notarized? Does it need to be set up on a date prior to the offer being accepted by the bank? Are you as embarrassed about living in Fontana as I am? Ok, you can ignore that last one. But I am really hoping you can help me out with my other questions.
Commercial Real Estate Broker · Fontana, CA · Member since 2008 · 68 posts · 20 votes
17y
Joe,
You set up the land trust at home, at the park, where ever you like. It does need to be notarized but only after the sale (The cash investor only does this).
No it doesn't get recorded with city, county, nor the state. That is the reason people use land trust it is to hide ownership, if you record it; it wouldn't be so private.
Don't get it confused with a living trust. A living is recorded.
I like Fontana because I have a nice cash flow in my Fontana properites...lol
Commercial Real Estate Broker · Fontana, CA · Member since 2008 · 68 posts · 20 votes
17y
Cucaloco,
No, a land trust is a document not an entity
All,
If you want a copy of my land trust email me. I have got approval from my real estate attorney (he is the one that created my trust). I cannot give it to no more that 10 people per his request.
Residential Lender · Beaumont, CA · Member since 2008 · 1 post · 0 votes
17y
Hello Anthony,
I'm trying to learn how to wholesale properties using a land trust. If you haven't met your quota would you mind sending me that land trust copy. [REMOVED]
Real Estate Investor · Northern Territory · Member since 2009 · 136 posts · 10 votes
17y
hey great info. I was getting really frustrated because i have 7 buyers with cash and a million reo's! I just couldnt find a title company to do the double close without freaking out. If you still have a copy left can i have one so i can see what this looks like? My email is in my signature.
As soon as i see the document im sure it will be clearer in my head on everything. since your in my state are you using any contingencies to protect you if your buyer decides he doesnt want the property?
im guessing you find a deal, put in the offer so there i room for repairs and what not, when its accepted you are having your buyers quickly check it out hoping they want it as long as its in their buying criteria right?
how would the earnest money work? just let the bank cash your check when he closes and you work that into your fee? are you getting paid at closing?
i cant think of any other questions but i just want to have some details and if i can get this down, i will do offers on sunday! Any help bud? Email me if you would! Thanks again and good luck!
Real Estate Investor · WA · Member since 2009 · 1 post · 0 votes
17y
Hello Anthony,
The information you provided is extremely valuable, thank you! Is it already too late to ask for a copy of your land trust? I am a real estate agent and investor but never tried handling transactions by using this technique. Would love to learn from experts:).
Real Estate Investor · Northern Territory · Member since 2009 · 136 posts · 10 votes
17y
the problem with the LLC in california is the stupid $800 automatic tax due by dec 31! even if u open it in october! then by april 15 of the next year you better have your next $800 in! Its such a pain! I learned this yesterday from the Franchise Tax Board because they dont send you out any info on what you owe. I went through legal zoon and they dont bother to expain when its dues!
Real Estate Professional · San Jose, CA · Member since 2009 · 45 posts · 39 votes
17y
Anthony,
Sweet. I am a newbie. I keep hearing about land trust in my training teleseminar but have never seen one. I would love to get a hold of a sample land trust document that you have for my future use. Is it possible for you to email me one to my email account? Many thanks.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
It is not that much of a problem when using it for a flip. SImply roll the costs of the LLC on to your end buyer and they are responsible for the next year's franchise tax fee anyway.
If you own an LLC in CA, or any entity for that matter, it is the cost of doing biz here and we ALL must pay the $800. You should have a competatnt CPA on your team to help you keep up to date with rules and fees and pay the taxes on time, both income and franchise.