NOMINEE TRUST OR LLC OR...... - Posted by J.D.

Real Estate Investing Real Estate Law
1

Posted by Rich-CA on October 01, 2007 at 21:47:45:

The EIN is used so you can open a bank account in the name of the entity. Also should you employ anyone using a 1099 or W-2, you use this to report their income to the IRS.

2

NOMINEE TRUST OR LLC OR… - Posted by J.D.

Posted by J.D. on October 01, 2007 at 16:24:40:

Hi and thanks in advance!

Sorry this is a two part question.

Part one:
I live in Ma and am just starting out in real estate investing. I was told by an investor to use a nominee trust to buy property through. I opened one (as trustee)and now have been sent a employer identification # (ss4). Why did I get it and what to do with it??

Part two:
I have someone in my family that wants to partner with me, mostly as a money partner and I would like to use the trust to do this and make her a beneficiary along with me. Is this a good option as apposed to opening a LLC or partership? This will be mostly for wholesale, option and possible rehabing at some point.
I’m not sure how many deals will be done with her and thought it could be good to do it this way insted of the cost etc of opening an LLC for the unknown amount and length of the partership. Plus I have the trust opened already.

Thanks so much for any input you guys have,
J.D.

3

Re: NOMINEE TRUST OR LLC OR… - Posted by J.D.

Posted by J.D. on October 03, 2007 at 16:00:47:

Thanks for the info.

4

Re: NOMINEE TRUST OR LLC OR… - Posted by John Merchant

Posted by John Merchant on October 03, 2007 at 10:18:08:

And remember you’ll want a good written and signed agreement between you & your partner so as to make clear who does what, when, how much, etc., etc…so as to avoid fights between you over who agreed to what.

Using the Trust as the entity to buy and hold is OK as it’s as anonymous as any LLC, maybe more so, depending on state of LLC’s formation.

You’ll have to show and prove some things about the trust to your bank to open a bank account, including the EIN, your authority as trustee, etc. so you should get going on that if you haven’t already.

5

Re: NOMINEE TRUST OR LLC OR… - Posted by J.D.

Posted by J.D. on October 02, 2007 at 07:15:49:

Thanks for the info Rich.

Anyone on part two? Please.