Property Investments

Filing a fraudulent lien can be punishable by heavy fines and or jail time.  Financing statements and other lien filings are important tools for the business community.  However, fraudulent filings are sometimes used to do harm to an individual or business.  The legal community takes fraudulent filings seriously.  

Real Estate Trust

Reasons to Purchase Investment Property Under a Real Estate Trust:
A real estate trust is widely used as a tool to disguise owner names, help with estate planning or allow a group of people to invest in a property without getting taxed differently. Here's why a real estate trust may be a good option for some investors:
Anonymity. Not too long ago, real estate trusts were a great way for an investor to remain anonymous, especially if they were investing in properties that were in, or near, the same town they lived. But as counties increasingly go online with recorded deeds, and town assessors go online as well, it is more difficult for anonymity to be maintained. If an individual is looking to buy an investment property alone, they will be the principal trustee of that trust by default, and their name will often appear on tax records, assessment records, and any other recorded documents that can be found online, including the deed as well as the declaration of the trust. To benefit from some level of anonymity while receiving the same tax treatment of an individual, it makes more sense to do a realty trust when a number of people have interest in the property being obtained.
Multiple owners. If there will be several owners of an investment property then a trust is very useful to document the relationships and ownership interests of all the owners, in a consolidated way.
Estate planning. For those looking to ensure that their investment property can avoid death taxes, many will transfer the investment property 

Reasons to Purchase Investment Property Under an LLC

For some investors, an LLC is the best way to purchase property. Here's why.

• Liability protection. Properties managed under an LLC have limited liability for the owner, meaning that should the property be subject to a lawsuit, the owners of the LLC can only be sued within the constraints of what the LLC owns, and not beyond that. This means that if you bought a commercial property under an LLC and someone files a claim against that property because they fell on some ice in the parking lot during the winter, the claimant cannot be rewarded reimbursement out of your personal assets. If the building was purchased under your own name, however, you risk exposure.
• Anonymity. Although you can look up corporations online in many states, and find out who the owners are, it’s a step most people still don’t take. At a community level, LLCs tend to offer more anonymity than realty trusts, unless you advertise the LLC.
• Commercial properties. If the target property will have more than one tenant, such as a multifamily apartment building, or will house commercial retail tenants, it is wise to purchase it under an LLC. A property like this is subject to a considerable amount of risk compared to a single-family home where only one person or one family comes home to it every day. Commercial buildings of any nature have a continuous daily flow of visitors and are often located in areas of high traffic. Accidents can happen anywhere and even the most conscientious of owners are still subject to lawsuits of any kind. Insurance companies tend to settle claims, even when the owner is at no fault, which can make insurance premiums sky rocket and limit the owner’s ability to get a policy. Having an LLC as a double layer of protection is a smart way to make sure no one can come after your home or other assets, should your insurance fail to cover you.
  

How to transfer real estate to an LLC

Have your attorney to prepare a deed for the property. If you are the owner of the property, sign the deed transferring the property to your LLC with a notary public. File the deed in the deed records for the county where the property is located. If the property is currently mortgaged, contact the lender to get approval prior to the transfer as most mortgages have a due-on-sale clause.

How to use a Series LLC

A Series LLC is a Limited Liability Company that provides protection through a series (cells) of individual properties which protects one property from the liabilities arising from the other series in the LLC.  Although each cell of a Series LLC can own distinct assets, incur separate liabilities, and have different managers and members, a Series LLC may be able to pay a single set of annual state fees and may be able to file one income tax return each year.

The procedure for adding and deleting a series or a property is as easy as amending the LLC.  Each series or property can enter into contracts, hold title to assets and grant liens.  Each series or property can also sue or be sued.  You can also try and minimize the chances of one series or property being held liable for liabilities of other properties - 

All properties maintain separate bank account.

All contracts should be signed in the name of the property. ABC LLC, 101 Broadway only.

All loans between properties should be documented.

All transactions between properties conducted in an arms length at fair market value.

All properties file a fictitious name in each county where it owned. 

All assets of each property separate from the other properties.