Buying Property with a Land Trust


– Hi, Clint Coons here with
Anderson Business Advisors. And in this segment,
we’re going to discuss purchasing real estate with a land trust. Now, for those of you that aren’t familiar with land trust, there’s two different
ways you can set it up. You can set it up with
yourself as the trustee, or you can use what is referred
to as a nominee trustee. That is someone who
will serve in your place for the purposes of maybe deeding property into the name of the trust or actually buying property
in the name of the trust. And the whole concept here is that you don’t want
your name to be on title. So if somebody was looking, they wouldn’t associate
you back to the property. That means essentially what we’re doing is looking for anonymity. Now, although anonymity is your friend, when it comes to an aggressive attorney, it can also be a potential problem for you when you’re trying to purchase property in the name of a trust. Because when you go to buy a property in the name of a trust, a land trust, and you’re using a nominee trustee, the title companies typically require that the trustee is the one that signs off on all
of the documentation. Now, I know inside of a land trust, if you watch my other videos, that the beneficiary are the ones that have all the control
over the land trust. So technically speaking,
it is the beneficiary who should be signing off on the trust, but it’s not the way it works. You know, I’ve done countless
deals with land trusts. In fact, watch my other
video on selling property with a land trust and I’ll recount you a story that I currently
have on a property I just sold in Hawaii. But the fact of the matter is is that when you’re trying to buy property in a land trust and you have
this nominee trustee on there, the title company is not
going to read your trust. They just make an assumption. And this is really one of the
benefits of the land trust is that everyone assumes
that it’s a living trust or some other type of trust, and they don’t quite get what it is that they’re working with. So they’re going to require
the trustee to sign off. Therefore herein lies the problem. If you’re using a nominee trustee, and I’ve done this before for my clients, in order for this to work then it is the trustee who has to sign off on all the paperwork. So what I’ve done before, and, you know, mobile
notaries actually come out to my office sent
out by the title company and I sat down and signed
all of the documentation on behalf of the trust. If you’re using debt it’s
probably not going to happen, because most trustees will refuse to sign off on any debt, of course. I know I’ve been in that position before and they’ve asked that of me. So if you’re considering purchasing property with a land trust, then you yourself should be the trustee. Now, here’s another
option, what you could do. And keep in mind there’s an asterisk here. You could set up your trust, so when you set up the trust and you’re going to
choose who a trustee is, what you could do is you
set up your land trust here. Maybe instead of naming yourself as an individual as a trustee you choose an entity
that you own and control, like a limited liability company. So my trustee over here will be an LLC that I’ve set up. Preferably this would be
one that has anonymity. Maybe it’s a Wyoming limited
liability company, Nevada. Well, I show and use
Nevada because in Nevada to obtain anonymity you have
to have a nominee there. So I’d do it with a newly formed Wyoming or possibly Delaware
limited liability company to run this strategy. So the LLC is set up as
the trustee of your trust. The beneficiary, bene, is you. So if you’ve set up this LLC and you’re the manager of the
limited liability company, what’s going to happen when
you go to signing then, you as the manager will sign on behalf of the LLC, which is the trustee of the land trust. So now title will actually be taken in the name of this land trust right here. And on title, if the name of your LLC, let’s say it was Big Profits,
so title would be as follows: Big Profits LLC Trustee of 1632 Land Trust, dated, and of course, whatever date it was that you set this up. So that’s how the title would be taken. And so what occurs now is that your name’s not
actually listed there. It’s the LLC that will
be listed as the trustee. And that way you’re in complete control of the entire transaction. You don’t have to use an
Omni trustee like myself. Now, what’s the asterisk? What’s that little caveat? Well, technically speaking, and again, it’s not going to matter because again, title companies, they miss this stuff all the time. In order to be a trustee, you have to be, I mean for a company to be a trustee, it has to be licensed. Now, your company, of
course, is not licensed and you’re not going to
go through that process. So at the end of the day
who’s going to report you? Well, you’re not going to report yourself, so I don’t really see
that as being a problem. But it is a way, I mean it is a potential
issue you have to be aware of that at a later date someone
could raise the issue. Let’s say your trust is gettin’ sued, and they bring up the fact, oh, you set up an entity that’s not even licensed and registered. You don’t follow the laws of your state. I mean, it just a garbage argument that an attorney may use
to try to discredit you. But it would allow you to
complete this transaction. I have clients that have done this routinely with their land trust investing, and I’ve seen it work firsthand. So just keep that in mind. If you want to buy property in the name of a land trust
and you want anonymity, given the fact that it’s
going to be difficult or you’re going to have to pay someone to be your nominee trustee, if you want to control the
entire process, do this. Set up a Wyoming limited
liability company. Make it the trustee of your land trust. You’re the manager of that Wyoming LLC and then you sign on it. My name’s Clint Coons with
Anderson Business Advisors. And in this video we talked about how to buy property
with a land trust. (upbeat instrumental music)

17 comments

  • Well, at least you are disclosing that it could still cause problems if you get sued by someone using a pit bull of a lawyer. Full disclosure is always best. Question – are people in Pennsylvania able to use a land trust?

  • Good Goin great strategy

  • I don't want a channel I'm just commenting

    I didnt recognize you without the suit…

  • I don't want a channel I'm just commenting

    What kind of license do you need, and how would you go about getting it?

  • Clint, can "Big Profit LLC" be both the trustee and the beneficiary of the land trust, so that I don't need to create two LLCs and pay double fees? Thanks.

  • Thank you so much for your great content.

  • David Molina Amar

    You could also set up a PTC private Trust company to act as trustee in all your land trusts

  • How should I do it if I want to assign the property to an end buyer?

  • Hello Howe much do you charge to set up all this the land trust and the LLC?

  • Valesquez Bowen

    Hey Clint I am a platinum member…My qurstion is do you have to use your Wyoming holding LLC? Couldnt u use one of your single member LLC with the state u buying the property in?

  • Do It Yourself Jim

    Would that LLC need to be set up as a S corp, C corp , or be disregarded for tax purposes?

  • Here's a topic no one has covered, what keeps anyone from selling or mortgaging your property held in a land trust, especially easy if the trustee is a LLC. The trust name, trustee name and date is printed on the deed, all they do it write up a same name trust , create a LLC with same name in any state and go the bank for a HELOC or Loan, or easier file a quit claim deed or go to a title company to sell the property to their partner. They have a trust and registered LLC docs so they can be there self without any fake documents. What am I missing?

  • Clint, with you listed as beneficiary of the Land Trust does that expose you to any personal liability if the property were being rehabbed and an accident were to happen? Would it make any more sense to use an LLC as the beneficiary to minimize personal liability? Thank you for all the informative videos!

  • I'm confused about something… If I'm going to do a mortgage in a trust, wouldn't they have my credit pulled? (So wouldn't it still shows I own property?) When I transfer it to the LLC, do i transfer the debt to the LLC? I guess I'm confused there…

  • Hello: Clint Thank you for the Videos.

    Wyoming Business "online URL" only gives us the Domestic LLC as a choice.

    https://wyobiz.wy.gov/Business/RegistrationType.aspx

    I think i heard we want the Foreign LLC if we don't live in that State? again i will not do business there or in my state under this name. I found additional links of PDF's for outside"Foreign" LLC forms what would you suggest or do you have a Video "URL" on this subject for the paperwork needed for a Wyoming Foreign LLC. as shown in the below link.
    http://soswy.state.wy.us/forms/default.aspx?root=Business

    Thank you

  • Piicture Perfect

    Who will be the trustee if you don't have a LLC?

  • Clint: Should the LLC be "Disregarded" and Would the Manager (myself) also be the Member or should the Member be a different entity that I own (Corp or LLC?

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