All Forum Posts by: Jennifer Gligoric

@Mike S.  That last bit was our response from one of our lawyers when I showed him my last reply to your post just to make sure that I wasn't missing something. It's very important to me to give the most factual and correct responses I can here on BP and so I often will ask my team if they have anything to add as well.   He is very versed in this and has his advanced masters (L.LM in this field (Real Property Development).  

I believe Mike, we're saying the same thing here. Your assertion on the Garn St Germain Act is correct.

However, although no trustee is required to be named, users of anonymity trusts should anticipate objections from a future title company based on the proposition that a trust is not a legal entity—which it technically is not, even though trusts often act as if they are in fact legal entities. A trust is actually a contractual relationship, not an entity. Accordingly, one should be prepared to re-execute and re-record a deed which properly includes the name of the trustee.

In the case of anonymity, it is preferable to have a trustee as the public face as the trustee searchable and it provides an extra layer of protection. However, the existence of trustee does not change the beneficial ownership so long as the owner is named as the beneficiary of the trust. The beneficiary is not required to be named in a public recording. The private documentation of the beneficial interest in the Series LLC (which is the instrument to which I'm referring) is recorded as such. As far as reporting to the state, this also depends on if you are using a house of cards LLC system along with a Land Trust, in which you set up separate bank accounts and LLC's for each asset to be protected, or you are using a layered anonymous land trust combined with a Series LLC, and it depends on which of the 18 states you have chosen to do that in as only 18 states allow for a Series structure. I prefer Texas because of the business-friendly taxation and environment for owners in that State.

The truth is that a land trust on its own does not defeat due-on-sale because a land trust invariably contemplates a transfer of rights of occupancy—so due-on-sale provisions remain effective and enforceable. However, with careful planning, the due-on-sale clause is not triggered.

@Michael Doherty  I just asked Randy, my top advisor on my team since he held both a Series 6 and Series 63 when he owned his financial services corporation and he added to this - though I see you've gotten some interesting advice & feedback since I initially read this post  "Hello Jennifer, It’s my understanding with this securities license is that he would need to keep up his continuing education and contact a smaller firm where he can move his license to a new broker-dealer. I believe he has to write a minimum of 1 to 2 transactions per year to stay active. Then he would need to probably keep his fees paid on an annual basis. There’s a lot of smaller firms out there that will take on part-time representatives. One comes to mind is Primerica Financial Services or Raymond James."

No, it does not have to match the state of the property but the type of LLC or instrument should factor into which state you reside for structuring and tax purposes.

Investors who live or invest in California have franchise tax considerations they must be aware of that they can avoid with the right structures.  Same with Massachusetts & Delaware.

@Austin Montgomery Transferring the property into a trust, particularly an anonymous land trust within a Series LLC, would be a way to avoid the Due on Sale clause while also allowing you to utilize your LLC strictly for paying rents, contractors and doing business. You would need to keep your accounting clean and have the correct arms-length clauses to also use this structure as a way to mitigate litigation risks as well.

Even though obtaining loans through a trust or LLC is possible, it's difficult and it's much more costly than using your own name. Most underwriters just don't want to deal with it when it's a trust. Transferring though is a common practice.

Let's say you were the rarest of rare exceptions and somehow a Due on Sale was triggered, the remedy is just to transfer the ownership back into your name.  The reason the Due on Sale is not triggered when you transfer it into a trust is that you are still the beneficial owner of the property through the trust as a trustee.   In the case of anonymity there is a Nominee Trustee on the face of the deed, but it still never triggers.   

Hope this helps :)

This is a great idea and the keypad door handles you can find at Lowe's or Home Depot so it's not that big of an expense.  You just need to make sure that the doors are sturdy enough that it works correctly and of course, don't forget to put the required fire and other postings required of short term rentals either on the back of the door or wall - some states have stricter requirements than others regarding postings.

It would be great to have a fully-featured CRM dashboard that also integrates with Google (or other) calendars, schedulers and gives reminders.  So that it can be the ultimate dashboard for keeping up with everything from routine maintenance reminders to push notifications through email templates, either to onsite property managers or directly to tenants (i.e. Happy Halloween!  Remember if you are putting decorations on your balcony to make sure they are fire-resistant..." or "It's time for your annual apartment inspection, inspections will be from 10am - ..." ) as well as various input fields to track repairs, complaints, birthdays of tenants, etc. 

I just responded to another post giving this guy's name and his product because he came highly recommended to me.  Have you looked at John Burns Real estate Consulting?   He has analytics and various products, including dashboard products (I'm unsure about the expense) that can be a big help - but not sure if he'll have your particular area.  Might be worth a call.

How familiar are you with the area - you state it is relatively close to where you live, but enough so you feel savvy on the neighborhoods?   You might want to enlist the help of a realtor who will be exceedingly familiar with the neighborhood dynamics.  Just looking at the entire area doing the most basic Trulia search it's 1800 - 2200 a month average, but again, neighborhoods can be fickle and not bear this out.   

If you can't afford the analytics or don't have a Realtor, you might want to just physically go there since you live close and drive around.   You have hyper-local publications such as the Coffee Shop News, Greensheet, Pennysaver & other hyper-local and local owned magazines that will have rentals listed but they'll be at the local grocery, convenience, etc. stores around town and rarely have huge websites with all their listings on it.   If anything, you might be a nice little day or weekend trip out of the deal that will be fun. :)

@Paul Son - I understand the want to invest in other areas, but unless you are very familiar with the nuances of the neighborhoods and market, local is the safer and less risky option.  Not always though, I just had a great talk with Kathy Fettke of RealWealthNetwork, as well as, Rodney Miller of Trident Multifamily (both great people to follow by the way) and they became educated on using heavy analytics, realtors on the ground and other tools and are proponents (if you do your due diligence) of out-of-area buys.  It all boils down to investing in yourself and the education, and using the right tools.  One great source is John Burns, his real estate consulting analytics and dashboards are an investment but considered top notch.

Whatever you do and wherever you invest, good luck and welcome! :)