Posted by colvegas on January 06, 2006 at 16:10:51:
Future millionaire,
OK got ya and even though the financing covers both properties as being under one loan from a land trsut perspective in the setup it would be seen as two different trust entities in other words one trust for the building and one for the vacant lot.
Great questions and if I can assist you in this please let me know. cell:702-400-7632
Transfer of Building and Vacant Lot - Posted by Future Millionaire
Posted by Future Millionaire on January 05, 2006 at 13:45:12:
I have come across a man who has a three-unit building with an adjacent vacant lot. He is willing to allow me to purchase both of them subject to the existing financing with no money down. I would like to draw up two purchase contracts, one for each parcel. On the contract for the vacant land, I would like the purchase price to be $100. What I am interested in doing is having him deed the three-unit to one trust; I?ll call it Three-Unit Building Trust, and the vacant lot to another trust, Vacant Land Trust. He will then assign his beneficial interest in the trust that holds the three-unit to my LLC. I would like him to assign his beneficial interest in the other trust to my two-year old daughter?s self-directed Coverdell Educational Savings Account. Here are the questions I have:
Thank you guys for your response.
Re: Transfer of Building and Vacant Lot - Posted by colvegas
Posted by colvegas on January 05, 2006 at 17:17:26:
Here are my replies to your questions and I can not give legal or tax advice but I do work with land trust entities in investing.
#1. As to splitting parcels that is fine you are actually vesting title to the property to your designated trustee not the CESA. The CESA would be the beneficiary in land trust for the parcel where your daugther is a beneficiary in the CESA it is confusing but you are basically layering to protect assets. I like this approach.
YOu would from what I am reading use two different trusts to accomplish this.
#2Yes you can but I would not recommend it for longer holds which I define as 2 yrs or more on the property.
The other issue is if you are a beneficiary and the trustee well that is a dual role type conflict and if the IRS check into it you may be labeled as what we call a “dry or abusive trust” and can be pierced. YOu also if that happens lose all the protection a trust can offer you so I would separate those roles…
#3.Yes, what you could do is advise the trustee to forward the monies from the one trust contingency fund and have them credit you in the other trusts contingency fund. Not hard to do just administrative tasks.
the company.
#4.Yes but check with your tax attorney on you tax basis. A trust will defer taxes and resassments due to the actual title transfer of the parcel since there is no sale of real estate. I would also check with your local taxing authority.
#5.Not understanding this one. It sounds like you own this lot free and clear so why would you need a release from your mortgage company…??You would do a what we call an simple trust that is where the trustee justs holds both the legal and equitable title to the parcel. When you sell you terminate the trust and sell the parcel.
If I can help further please feel free to call me at 702-400-7632
Re: Transfer of Building and Vacant Lot - Posted by Future Millionaire
Posted by Future Millionaire on January 06, 2006 at 15:23:25:
Thank you for your response. As it relates to question #5, I checked the mortgage and both the building and the vacant lot are secured it. That’s what I meant by having the mortgage company “release” the lot.