Using trusts to buy and sell land

Who else uses land trusts to buy and sell land? I have been doing this for a while and some investors have asked why everyone doesn’t use trusts. So who else does?

Related note: Don’t scrub out trusts from your mailers. You can buy from them as easily as from an LLC and easier than from a church.

@laurie out of curiosity, what is your reason for using trusts to buy land? I can think of a few different reasons, but I’m curious what your motivation is behind it.

@retipsterseth There are a handful of reasons:

  1. Privacy - the trust is never recorded and there’s no way to trace who the real owner is without a court order. I could own 1000 properties, all recorded under a different trust name, and my assets are almost impossible to find.

  2. I don’t need to register my LLC in a state to do business there - and I don’t have to argue with the title company about the need to register there!

  3. Flexibility - I can transfer ownership to someone else without selling the property. For example, let’s say I want to give little Johnny a piece of my land as a graduation gift. I can make him the owner by creating some new documents that are legal but not recorded.

  4. If I buy using other people’s money, I can pay them off early and get to keep all the profit without having to change the deed.

  5. I can make someone else a co-trustee to let them market the property, sign listing agreements, etc. without getting in trouble with the real estate board for selling property without being a licensed agent.

There are more reasons but these are the biggies.

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@laurie Great info, thanks for sharing.

@laurie The biggest challenge I have with using land trusts is the Trustee issue. You have to have a trustee that 1. you trust completely, 2. understands real estate investing, and 3. is readily available to sign docs. It also helps if the trustee has a different last name than you. That’s the only reason I don’t use them. They do have some great benefits.

@shipley1133 Right on that - “trust” is key. An attorney suggested I create an LLC to be the trustee, which I did. That’s works.

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@laurie that’s a compelling list!

One note, most assessors I’ve seen will still require some notification if the trust ownership changes, for the purpose of reassessing property taxes. Even though the deed isn’t changing hands, it still needs to be disclosed that the person behind the trust is changing.

Now, I’m not sure how they would even know one way or another, but this is what my attorney told me when I looked into it.

Even so, you point out several advantages that are worthwhile to consider.