All Forum Posts by: Ryan Seib

Okay I think you are misunderstanding me, since I was just trying to answer the question, not advocate a particular structure. The actual arrangement of parts is situation dependent as you point out--depends on state laws, etc. The reason I answered was to help flesh out the anonymity aspects of LLCs and trusts and how those things tend to work. As to whether there is an address listed for the LLC, well in WI and other states at least sure, there is an address listed for the LLC. But that address can be an attorney's office!

So why would one do it that way (the way I had mentioned). This could be a longer discussion. And again I am not advocating any particular way, especially as would apply across the board and across state boarders. But one good reason I can think of not to have a trust own it is because the trust then becomes the defendant in any lawsuit. Trusts can be expensive to set up, difficult to administer, an complicated to defend. As a defendant a trust is vulnerable in all the same ways it is for tax purposes, but more so. And presumably not too many people own 1 trust per property. So a trust that owns the entire portfolio is liable for the entire portfolio since everything the trust owns is collateralized for liability purposes. The LLC may be a manager but the manager is only a defendant as far as E&O. Another thing I can think of is trusts are just plain complicated to use with partnership structures, if the trust is the only owner. Because parters essentially have to be "beneficiaries" rather than partners which is complex. Not to mention I believe trusts can be taxed much more unfavorably than a partnership. But you would have to ask a estate planner/cpa about that dimension. Just some thoughts.

If you put together a good enough deal for the LPs then present it as it should not matter what your own compensation is, as long as the deal works for them. But better to bat on a track record and everything buttoned up of course. 

Greg you may be right of course since I do not know Texas law. But I think you misunderstand me. You can have an LLC be a manager, a trust, etc. I agree with that, and it would presumably provide anonymity in states where managers of the LLC are public record (at least not WI, DE, IL as far as I know). I did not say anything about a due on sale so your response seems a little out of place? I agree trust transfers do not violate it thanks to the Garmain St Germain act, and that LLC transfers usually would. Perhaps I misunderstand you as well? But yes I agree with you generally though my "scenario" does provide anonymity apparently even in Texas, if you also make the trust a manger as you noted.

A trust is a contract between you and its beneficiaries (which could be or include you) to own property and treat it like a personal owner would. So you can create a trust (ie a contract) "named" Land Trust Number 2 for example. Then make Land Trust Number 2 the owner of the LLC that owns the property. That way when people look up public records to see who owns the property, all they see is the LLC information. And when they look up who owns/manages the LLC, all they see is the trust information. And the trust is just called Land Trust Number 2 so it is nondescript. And nowhere in the public records are you required to disclose to anyone who is in charge of Land Trust Number 2 in any way. Even your mortgage lender barely cares about the trust layer they only ask you to certify you are still going to pay the mortgage as agreed, etc. So that is probably what you have heard about and it is a good tool for those who want the anonymity!

@Candace Ellison were you successful in levying the account after learning of the BK? How much would you have taken from the estate after they filed BK? The trustee of the estate is the one who cares about the violation of the stay, not so much anyone else. The trustee is a lawyer who gets paid based on total value of the estate so you are taking money out of his/her pocket if you violate the stay. So keep that in mind. That said most trustees seem pretty nonchalant about minor violations. Of course the debtor attorney is a factor if he/she is a bulldog. But still I find it hard to believe the BK court is going to treat this as a major breach other than ordering you to pay back what you took and maybe a penalty for the violation itself. That said I would also recommend highly retaining a BK attorney yourself to defend you in court rather than appear alone.

I have seen partial carries by seller and then either active or passive joint venturer deals pencil out.

Yes like robert kiyosaki says (to paraphrase) poor people want liabilities they think are assets, whereas wealthy people want assets...and control is an asset whereas income is a liability. Sometimes a NNN tenant figures it out so they get as much control as possible under the lease to over the space. NNN is just a step lower than ownership, but without the risks of a mortgage, personal guarantees of debt, local market/government forces on property, etc. Not to say this is always the case but I have had clients where they rent to Walgreens and they are discouraged even from visiting the property--they have no say anymore until the lease is up!

Connect with some local brokers who do hotels and or other owners who have good management and ask who they recommend.

Ask what the municipality is willing to loan you to get the project done. They might even create a tax incentive or very low interest loans if they want it bad enough. Do not hesitate to ask since the local government is just made up of people and they are able to make some things happen that private individuals cannot.

The sub only gets lien rights if the sub properly notices the owner, either during the contract phase or a certain period before filing. State procedure can be complicated I would tell a client to read the statute but not expect them to get it so I give them a flow chart so it is easier to comprehend what is going on. 

In your case you simply need to have a local attorney familiar with the liens to help. This is one of the areas of law that is way more about procedure than substance and hence attorneys are (somewhat unfortunately) a necessary cost.