Dean Graziosi

You’ve probably heard about land trusts and how they can benefit you as an investor, but do you know the reasons why? Below are some of the top questions and answers pertaining to land trusts that will help you when deciding whether or not this option is right for you. Read through them carefully before making any big decisions.

The question that should definitely be answered here is what is a land trust? A land trust is a simple document detailing an agreement between the trustee and beneficiary that is designed to keep the land owner’s name off public records. This is so the public cannot access information about the identity of the owner. A tax I.D. number is not given to the land trust itself, but instead is provided to the “beneficial interest”. The “beneficial interest” could be a person or entity. This keeps just anyone who is simply curious from seeing exactly what you, the investor, actually own.

Question #2, why would you want a land trust? This is a great question to answer if you really aren’t concerned with who knows what types of property you own and how much. Still, there are times when people wish to gain access to information for reasons other than simple curiosity or to find a particular piece of property. Let’s face it, anyone wishing to buy a property from you will have most likely seen the signs or ads and know how to contact you directly concerning the possible sale. Other people, such as those wishing to delve deep into the personal information of others can conduct simple Internet searches to find out just how many properties you own and their exact locations. These aren’t necessarily people who have a vested interest in doing business with you the investor. This does not mean those searching for the information have any intent to do harm, but it does mean your privacy is compromised. Just think of the vast amount of information available via the Internet on people now as it is. It isn’t that you don’t want people to know about your properties. You do want them to if they are looking for one to buy. If not, you may wish to keep the rest of your personal and public life as out of reach as possible. This may be especially relevant with all the concerns about identity theft and other issues that can compromise one’s privacy and quality of life. Simply put, owning a land trust just keeps less information  available to the public and you safer as a result.

Finally, can you own several land trusts? The answer to this question is yes. You can own several properties without making your name public on them. Taxes are still reported, but this is done by the beneficiary of the agreement. Many investors choose this method to maintain some anonymity and still sell properties.

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Once a buyer and seller have reached an agreement but prior to escrow a preliminary title report should be reviewed.  It’s not a very exciting document to read, but it is something that you should give your full attention to because it can be one of the most important documents a buyer will receive.  There are three key areas that a buyer needs to pay close attention to when reading a preliminary title report.

The first thing in your title report that you should pay particularly close attention to is the legal description.  The legal description is a description of where exactly the property is located and the boundaries of the property.  If you have purchased a condo the legal description of the unit should the property’s interest in any common areas and any exclusive or non-exclusive easements.  It should also provide you details about parking or any storage space that is included in the property. 

The next important part of a title report is the section that pertains to property taxes.  Property taxes are commonly referred to on a title report as the primary lien.  If the previous owner owes any outstanding property taxes it cannot be transferred to a new owner until the outstanding taxes have been paid either to the city or county where the home is located.  It is also required that any outstanding tax balance be paid before any other debt holder on the property receives their payment.  In order to ensure that the transfer of property goes smoothly, you should ensure that according to the title report all taxes have been paid on the property.

The final area that should get thoroughly read is the section referring to mortgage liens.  Information regarding mortgage liens can typically be found under the property tax section.  Lien holders are commonly listed according to how much money is still owed.  When the sale of a house closes all of the liens on the property must be paid in the order in which they appear on the title report.  If the home was a short sale, there will not be enough money to satisfy all of the outstanding debt which will leave one or more lien holders shorted.  For a short sale to close, the lenders who will be shorted must agree to the lesser amount that they will receive.

As the buyer of a home it is important that you thoroughly read the preliminary title report.  In order for the closing to progress problem free it is important to discover any potential problems before it is too late.  If you do not understand a section of the title report, you should ask your real estate agent for help or consult a real estate attorney.  

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Whether you own a family home or you are a real estate investor, making the decision to rebuild or remodel can be a difficult one. When you have a property that needs a lot of work it becomes necessary to make a decision. Do you knock it down and rebuild from scratch or remodel the entire home to make it suitable for living or resale? Regardless of how you may have come into such a property, there are many things to consider carefully before making this decision.

The key is to choose the option that is going to give you the most return on your money, and that is going to make the most financial sense overall. You also want to consider the needs of your family if it is a family home. Consider the property value without the house on it. Is it worth it to rebuild completely? Consider also the cost of remodeling. Would it be that much more expensive to start from scratch?

There are some other things to consider as well. How much remodeling needs to be done? If walls need to be removed or repaired, plumbing needs to be completely redone, or floors are uneven, it may make sense to start over and rebuild. If the foundation is going to need to be repaired in addition to other major remodeling, you definitely want to consider rebuilding. It costs a lot of money to repair a foundation, if it can be repaired at all. If you want the home to last many years to come, this is an important consideration.

In general, if the remodeling is going to cost nearly as much as rebuilding from scratch, you may be better off doing just that. However, at the same time you do not want to jump to that conclusion. If a home is livable but needs some tender loving care, it may make more sense to remodel one room at a time than to boot yourself out of your own home in order to rebuild. It is easier to live without one room than an entire house. In addition, if something needs to be remodeled that requires you to leave the home, you may do so for a few weeks rather than several months.

Overall, you want to do what makes sense for you and your family if you are looking at a family home. If you are a real estate investor, you want to go for the decision that makes the most financial sense. If you can resell or rent for a higher price by rebuilding, then it makes sense to take that route. However, if the housing market only supports so much value, it would then make more sense to take the less expensive route of remodeling.

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