Investing in Real Estate is an easy, effective way to make money, but many investors make the mistake of buying property in their own names, instead of using a Trust, such as a Florida Land Trust. Utilizing a Land Trust is inexpensive and simple, and will ensure that your personal details remain confidential for any property purchased, held, financed or sold through the Florida Land Trust. This limits the liability on you as a property owner and is very important, especially when a group of buyers purchase property together. While reducing liability, you still get to retain your ownership rights including the right to claim the Homestead Exemption, as long as the home is your primary residence.
Aside from individuals or private groups, such as friends or relatives, a Florida Land Trust can be established by any business group or entity including a Limited Liability Company (LLC). The Land Trust is set up in the name of an LLC whose responsibility it is to manage and sign as Trustee of the property. The Trustee will simply create and hold the real estate in their name, with the ownership rights remaining those of the Beneficiaries who own the Land Trust. Any decisions that are made in regards to the Land Trust or any direction will be given by the Beneficiaries who retain full power over it.
One of the main reasons that you should never hold investment real estate in your own name is that you have no control over who sees that you own the property. By showing that you own a property, you are making it extremely easy for people to seize it, whether they are lawyers, creditors, ex-spouses or tax authorities. A Florida Land Trust removes the asset from your personal name and no one will know that you even own a property, as your name is not listed in the public records of the county where the property is located. This is also ideal if you have judgments or liens against you, and similarly the co-beneficiaries’ judgments cannot affect the property. You will still, however, be able to buy and sell property using the Florida Land Trust.
Owning many different properties makes you an easy target for lawyers, which is another reason for holding your property in a Land Trust or LLC. Any lawsuits that might come against you are also more likely to be settled with your insurance company if the lawyers do not know about any additional property you might own.
Another advantage of placing your property into a Land Trust or LLC is that there is no probate to worry about when you pass away. The property can automatically go to whomever you name in your will. There are no lawyers involved and no fees to delay the process.
One thing to consider when choosing whether you should buy your property using a Florida Land Trust or use your own LLC is that although the LLC provides confidentiality, it is easy for anyone to do more in depth research and find the listed directors, managing agents, or owners of the LLC, which will then give away the ownership of the property. For more information about registering an LLC or any other type of entity you can hire a company such as Corporate Creations. Corporate Creations is a leading provider of incorporation services, corporate document filing and retrieval services, independent director/manager services and registered agent services nationwide and offshore. They provide services for legal professionals, accounting professionals and businesses worldwide.
In order to set up a Florida Land Trust you can approach a registered company or law firm to do this for you, but the process is pretty straight forward and you can do it yourself. You will pay around $10 to transfer the property to a Land Trust, and then a further $250 for the setting up of the Land Trust through the Land Trust Service Corporation. Legal fees can range anywhere from a few hundred to a few thousand dollars for preparing the Land Trust. There are also additional fees after the first year of $100 per year and any additional Trusts created are $200 including the fee for the first year. Should you wish to set up the Land Trust yourself I would recommend you join your local Real Estate Investment Club such as the Distressed Real Estate Investors Association or Boca Real Estate Investment Club. Another option would be to purchase Mark Warda’s book titled Land Trusts in Florida, 9th Edition which can be purchased at your local book store. Mr. Warda’s book comes with an easy step by step process in setting up a Florida Land Trust as well as a content CD with all of the documents you will need to get this process completed successfully.
Also when closing on an investment property you want to make sure you are closing with an investor friendly Title Company such as Independence Title. Having a closing agent that is knowledgeable with the Florida Land Trust and LLC will ensure that you as the investor are protected and your property is titled properly. As an example it’s suggested all investors when purchasing property in a Florida Land Trust title the property as follows “1234 Main Street Land Trust dated January 1, 2011, John Doe, as Trustee, with full power and authority to protect, conserve, sell, lease, encumber, or to otherwise manage and dispose of the real property hereinafter described, pursuant to Florida Statute 689.071” making sure to always substitute the correct information to fit your transaction.
Setting up a Florida Land Trust or creating your own LLC is by far the best and easiest way to ensure that all parties buying investment property are looked after. The asset will be secured and the process of buying and selling real estate can commence without any problems that any of the property owners might face. It remains an excellent, completely anonymous way to deal with property as a form of investment, and to also grow your investment portfolio easily and effectively.
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