Re: Define a Land Trust. - Posted by Bud Branstetter
Posted by Bud Branstetter on December 08, 1998 at 11:44:10:
The first term you use Trust Deed is the legal instrument to secure against the real estate someones pledge to repay a loan. It is also called a mortgage and recorded as such in mortgage states. Next, it has “nothing” to do with the deed. The deed is document that defines the owner who has the right to possession, use and income from the property. Don’t pay the mortgage/DOT and the lender will take away your interest in the property, the deed.
The land trust is used, among other purposes when to prefer not to let the bank find out that the ownership has changed hands. You can do a sandwich lease without having to utilize the land trust. The owner just has to be willing to lease it to you.
If you do obtain ownership of the property through a land trust you do not have to sell it. You can rent it and enjoy the rewards of being a landlord. Most investors will want to sell at some short or intermediate term because there is usually not enough cash flow to make it worthwhile in the long term. If there is the cash flow it is accompanied by a large equity which would benefit you more if you had use of the cash the equity can generate. I would rather have 10K in a year or two, rather than 100/mo for 30 or more years.