Ok I'm thinking about setting up a Land Trust to invest start investing in Large Mulit-Family in Florida or Georgia. How should I do this?
I live in Virginia so I'm going to set up my first LLC here and will make my LLC the Beneficiary in the Land Trust and as long as I have a trustee that has some job duties this is smartest way to set this up to cover my tale
My doing this are there any laws in Florida or Georgia that may come up in the future just in case anything happens? I feel like I'm on the right track of thinking?
Will I have to form another Land Trust in Georgia or Florida since the states laws are all different? I do understand that Land Trust are not formally recognized everywhere as well?
How much does a Land Trust Cost? If I have assets in Georgia do I need to set up land trust in Georgia? Or say I start investing is assets in Florida do I have to have a Land trust in Florida?
I live in Virginia so my first LLC will be set up here
For questions on formation requirements and asset protection, you need to consult an attorney in both Florida and Georgia. Although I am licensed in Virginia, I can only speak to Virginia Law. Your questions are more geared towards the requirements in these two other states. You can find an attorney in these states by using the Florida and Georgia lawyer referral services. The service can direct you to a qualified, experienced attorney who handles business incorporation in those states.
My opinion - it depends on what you're trying to protect. I own the Lou Brown materials - mainly for the contracts. I have studied the land trust issue he passionately teaches investors. I tried to use it- but was convinced against going that route by two different real estate attorneys. They both said basically the same thing. If your goal is asset protection so nobody can try and sue you for your assets - 1. incorporate as a LLC (which works better than a Chapter S corp in real estate - and maintain separate bank accounts for it and pay the annual registration to keep it active, and do annual minutes to show it transacts business each year. 2. Maintain a high insurance amount on the property. This way- the asset is not in your name- so you cannot be sued personally, and if you can prove the entity is "alive", the insurance policy will protect you anyway up to the limit of the policy amount. I keep $1MM on each lease option home I have, and a separate $2MM umbrella policy on me personally ( I also have two young car drivers with cars I own- as well as my own house-so I have to be careful with that too). Anyway - had one situation 10 years ago- was sued by tenants - wife fell down stairs holding 6 month old baby- three days after moving in. Claimed it was my fault. Was met by Sheriff at my house- twice. Once- was sued personally, and company was sued later same day. Turns out- insurance hired the attorney. He learned the rental house was not in my name- other side dropped the personal suit immediately. Insurance offered them a low ball amount that they accepted immediately. Reason- it was cheaper to settle than prove we are right in court - would cost twice as much! So- no reason for a land trust when I was sued. Fortunately, no other lawsuits in 10 additional years. If your reason is onbly to hide ownership for some other reason, land trust would work - just not sure what it provides - not legal protection with the above in place.
Thanks Richard for sharing your experience.