Tag Archive for: landtrust webinar

You are here: / / landtrust webinar

Posts

Why I Avoid Using an LLC As a Land Trust’s Trustee

/in , , /by

By: Mr Land Trust

Many of my students have asked me the question: “Can I use my LLC as the Trustee of my Land Trust?” While it might seem convenient, in my view it creates more problems than it solves. Worse, it can be a fatal flaw in your Land Trust.

Here are a few reasons I avoid using an LLC as a Land Trust Trustee.

article continues after advertisement

Privacy Vanishes: The Public LLC Problem

One of the primary benefits of a Land Trust is anonymity. You shield yourself from frivolous lawsuits and unwanted attention by keeping your name out of public records.

That veil of secrecy is torn away if your LLC is registered in a state that publicly discloses member information and serves as the Trustee. Anyone can search the state’s business records and discover your connection to the property, defeating the purpose of the Land Trust. This is especially true in states with transparent LLC registries.

The Self-Dealing Dilemma: Contractual Limitations

In most jurisdictions, you cannot legally contract with yourself. This is because the legal concept of a contract requires two distinct parties. When your LLC, which is solely owned and controlled by you, acts as the Trustee, and you are the sole member of your LLC Beneficiary or the sole individual Beneficiary, you essentially create a situation where you’re contracting with yourself. This can lead to legal complications and challenges to the validity of your Land Trust. This obstacle creates a situation where the authority of the Trustee can be called into question.

Operating Agreement Exposure: Authority Challenges

At some point, your Trustee will likely need to demonstrate their authority to sign documents, whether for a sale, refinancing, or other transaction. If your LLC is the Trustee, expect to be asked for your LLC’s Operating Agreement. This document reveals the members, managers, and internal workings of your company, again compromising your privacy and potentially exposing sensitive business information. This is an unnecessary and avoidable disclosure.

article continues after advertisement

Side-stepping Another Potential Pitfall

Beyond privacy and contractual issues, when you avoid using an LLC as a Land Trust Trustee, you automatically avoid creating issues with title companies unfamiliar with this arrangement.

Why an Individual Trustee is Superior

Now, let’s explore the advantages of using an individual as your Trustee. First and foremost, you can choose someone you trust, like a family member, business associate, attorney, accountant or friend. They might even agree to serve for a nominal fee or for free, saving you significant costs.

Secondly, you can use creative naming strategies to allow one individual to serve as the Trustee for multiple Land Trusts, further simplifying your management. This method creates a layer of professional and organized anonymity that is difficult to replicate with an LLC.

An individual trustee offers flexibility, privacy, and simplicity. They are less likely to raise red flags during transactions and provide a more straightforward approach to managing your Land Trusts. And they can be available to act without regard to standard business hours

In Conclusion

While using your LLC as a Land Trust Trustee might seem like a shortcut, it’s a path riddled with potential problems. Protecting your privacy, maintaining contractual integrity, and avoiding unnecessary disclosures are paramount. When you opt for an individual Trustee and leverage creative naming strategies, you ensure your Land Trust remains a powerful tool for asset protection and privacy.

Mr Land Trust, Randy Hughes

I encourage you to learn more about the benefits of using a Trust to hold title to your real estate investments by going to my FREE online training at www.landtrustwebinar.com/411 and text the word “reasons” to 206-203-2005 for my free booklet, Reasons to Use a Land Trust. You can also reach me the old-fashioned way by calling me at 217-355-1281. (I actually answer my own phone, unlike most other businesses in America today!)

Mistakes I Have Made (That You Don’t Have To)

/in /by

By Mr. Land Trust

As a young man, I never believed I would see 2025. I purchased my first rental house at age 19. While I had very little money to invest in real estate, I did have one very valuable asset…time. I majored in business administration and marketing in college. But I did not really learn anything of value until I met my mentor, Jack Miller. Driving down to St. Louis for a half-day seminar with two friends, my life was about to change forever (and my kids and grandchildren’s lives).

article continues after advertisement

My mentor taught me the value of time. He said, “If you want to become a millionaire, borrow a million dollars and have someone else pay the debt back.” He also taught me how to buy houses with little or no money down. This was a huge change in my conventional thinking. I was taught in college that you always needed 20% down payment and this frustrated my desire to buy many houses (I knew that I would never earn enough money to pay my living expenses AND buy many houses with 20% down). I did not have a lot of money, but I did have a lot of time. Things were looking up!

With my new-found knowledge, I began buying houses as fast as I could. It was the 70’s and houses were increasing in value 1% per month in my town. I could not buy them fast enough. Then came the 80’s and 90’s and I began to invest in other assets besides more houses. I bought partnership shares in a chain of catfish restaurants, apartment buildings, bank stock, network marketing company stock and commercial property. I soon found out that partnerships don’t work and don’t last (at least that was my experience). I made a little money with the apartment buildings but lost money on everything else (who loses money investing in bank stocks? Me!). Eventually, I got out of all other investments other than houses and one commercial property. It cost me a fortune to learn the lesson to stick with single family homes as my long-term investment strategy.

My mentor was THE first person to teach a seminar on buying houses as an investment. Even though Fannie Mae was formed in 1938 and could make 30-year loans, today’s most popular tool for home financing, the 30-year mortgage, wasn’t even approved by Congress until 1948 for new construction homes and even later — 1954 — for existing homes.

article continues after advertisement

Well into the 50’s and 60’s lenders were still making home loans with 5-year amortizations. This meant much higher monthly payments and very few people could afford to buy houses to rent out as an investment. Once the 30-year loan became popular, the value of homes began to rise.

By the 1970’s (when I graduated from college) inflation was in high gear and house prices began to rise significantly. You might remember the author, Robert Allen, and his book, “Nothing Down.” It was a best-selling book that made him famous (he learned his techniques from my mentor, Jack Miller, and wrote his book using those same concepts).

What is the moral of this story? Invest in what fits your personality. I like tenants who live in houses as opposed to apartments. I like long-term tenants that pay my house loans off for me. I like tenants with toolboxes that can fix things that break. I like tenants with families as they are more stable. I like houses because when I sell them the buyer doesn’t ask, “how much does this place rent for?” Instead, they pay full retail and do not determine value with rent multipliers.

Choose the investment vehicle that fits YOUR personality but stay away from partnerships. Be in control one hundred percent! You will be glad you did.

Mr. Land Trust

I encourage you to learn more about the benefits of using a Trust to hold title to your real estate investments by going to my FREE online training at www.landtrustwebinar.com/411 and text the word “reasons” to 206-203-2005 for my free booklet, Reasons to Use a Land Trust. You can also reach me the old-fashioned way by calling me at 217-355-1281. (I actually answer my own phone, unlike most other businesses in America today!)