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By petevigs1265
#834 I was reading up on Land Trusts recently (for wholesaling purposes) and decided I would give it a shot.

The process would be as follows:

Make offer as YOUR NAME "trustee of ABC Investment Trust"- exact vesting TBD at Closing.  This is done so you have time to market for a buyer once your offer is accepted.  After your offer has been accepted, and you use your "14 day inspection" timeframe to locate your end buyer, you label them as beneficiary just before closing, collect your wholesale fee, and get the Trust Agreement notarized by your closing agent.  After closing, you resign as trustee and have your end buyer appoint a new trustee.  The name of title never changes thus side stepping the banks "non assignability" clause

I was about to make an offer until my realtor sent me the bank's "REO Purchaser Prescreen" form.  In the bottom of the form, it asks for the following information if making an offer via Trust

Full Name of Legal Entity
Full Address of Legal Entity
Entity's Tax ID #
State of Organization
Names of All Owners of Legal Entity
Name Of Parent Company
Address of Parent Company
Name of Individual w Signature authority


Naturally this proves to be a problem with the above mentioned method of going about wholesaling w the Land Trust.  If the bank wants all names of owners up front then that defeats the whole purpose of this method.  Can anyone help with more information on how to go about using a Land Trust when you have to fill out these prescreen forms??  Or any other method for that matter?
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By RyanPal
#836 very interesting.  one of my associates flips reo's via a land trust and didnt mention this being an issue.  i'll try to get some feedback but he's redic busy these days...barely got a hold of him today hah.

post back your results if you find out before i can get some answers
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By RyanPal
#837 you peaked my curiosity and i read through some forums...i haven't found the entire answer to your question but this might help a little. here's a response on another popular forum:

Another change I have noticed is that the bank will now often require to see the trust bank statement to match the name vested on the contract. before, I would have "Will Barnard" as the trustee and the bank account for the POF was under "Barnard Enterprises, Inc" my corporation. Since the name of the account had my last name and I was trustee, they never questioned it before. Now they often want to see the trust bank account match.
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By RyanPal
#839 BiggerPockets seem to cover REO flips with land trusts.  i'd suggest making a post over there to see what they recommend since i'm not too familiar with many investors doing land trust REO flips in NJ.  please post back with what you find, i'll continue to do the same.
By petevigs1265
#844 Here's a post from Clint Coons i found after a 5 hour youtube spiral....who would have thought it was on biggerpockets....  Doesn't answer my question so much about the REO Purchaser screening form, but definitely sheds some light on Land Trusts

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Last week a client called about buying a HUD property.  After a short discussion I realized he was buying a trust that owned the right to purchase the property.  After reviewing the documents I found several errors.  I thought my client’s experience could help those of you interested in wholesaling property.

The Story:

In 2009 Wholesaler establishes the XYZ Land Trust with the express purpose to own real estate.
The Wholesaler is listed as the Grantor, and Beneficiary with the Wholesaler’s corporation as the trustee;
In October, 2010, the Wholesaler finds a property and enters into an agreement with HUD to acquire it;
On the HUD Agreement the XYZ Land Trust is listed as the purchaser with no mention of the trust date or trustee;
When the Wholesaler enters into the agreement with HUD, the Wholesaler lists the property on Schedule A of the trust;
The Wholesaler approaches my client with the express purpose of selling him the property owned by the trust;
Client contacts me and asks if everything looks ok.
Problem #1 – Trust is invalid for lack of trust corpus.


To have a valid trust the trust must have some asset however small.  This is referred to as the trust corpus.  When the Wholesaler created the XYZ Land Trust in 2009 he failed to fund the trust with any assets.  The first asset acquired by the trust was the contractual right to the HUD property in 2010.  If HUD wanted to break the agreement with Wholesaler they could argue that their agreement was with a non-existent trust and therefore unenforceable.

Solution #1 – Fund you trust with $10 upon creation.  How?  Simply list $10 on Schedule A as its initial funding and you have created a valid trust corpus.

Problem #2 – Corporation is not licensed to serve as a Trustee.


To my knowledge, to act as a Trustee every state, with the exception of Florida, requires that the Trustee be an individual or licensed trust company.  The Wholesaler’s corporation was not licensed.  If buyer wanted to break his agreement to purchase the Land Trust he might argue the trust violates state law and is therefore invalid.

Solution #2 – Have an individual serve as the trustee.

Problem #3 – Trust is not adequately identified on HUD Agreement.


When identifying a trust one should use care to distinguish one trust from another.  Trusts with the same name are typically distinguished based upon the trust date and trustee.  The Wholesaler listed XYZ Land Trust as the buyer.  What is to stop someone else from creating a XYZ Land Trust and asserting ownership to the contract.  Without other identifying information, any XYZ Land Trust could arguably be the owner.

Solution #3 – List the trust date on your agreements.  The Wholesaler should have listed the XYZ Land Trust dated 3.1.2009 as the purchaser and possibly the Trustee for further identification purposes.

Problem #4 – Do not list an asset in the trust that does not exist.

  When the Wholesaler entered into the agreement with HUD, the XYZ Land Trust did not become the owner of the property.  The XYZ Land Trust became the beneficiary of a contract.  When the Wholesaler listed the property on Schedule A of the XYZ Land Trust he misrepresented the Trust assets to my client.  If my client was so inclined, he could void his purchase and sale agreement with the Wholesaler on the grounds of misrepresentation.

Solution #4 – Only list what the trust actually owns e.g., the rights under the purchase and sale agreement.

Problem #5 – Only sell what you actually own.


The Wholesaler did not own the property but he did own the beneficial interest of a land trust that held the rights to purchase a property.

Solution #5 – Only offer to sell the beneficial interest of a trust that owns the right to purchase real estate.

We corrected the Wholesaler’s errors and my client went through with the transaction.  Everything went smoothly and now my client owns a trust that holds title to real property. If you are interested in wholesaling make sure your have solid documents and understand the nature of the transaction you are entering into.
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By RyanPal
#845 some good info there that is new material for me. it's much appreciated.  :beer

i'd still like to find the answer to your question.  i don't want to have redundant posts...did you post on BP or any other forums yet?
By petevigs1265
#846 Yes, I've posted on BP and had some mixed responses.  There has been a few back and forths between me and an investor in VA who uses Land Trusts on all his deals, not just REO's, along with a few others who have chimed in.

Follow the thread here! http://www.biggerpockets.com/forums/93/ ... an-reo-but
By petevigs1265
#848 Yeah right?!  You've got to be open minded in this business!  Ready to try out new things, or tweak existing things.  99% of the information and techniques out there work one way or another you just have to pick the best one or modify it for your situation.  I'm new so I'd like to find someone who's had to deal with something close to this before i go putting my name on unfamiliar documents.  I also have an appointment set up with an attorney next week.  If the guys on BP can't help maybe he can...
By petevigs1265
#850 Some updates:  I commented on a Land Trust video by Colorado Attorney Bill Bronchick.  He commented back and we had short conversation about my situation.  You can watch the video by using the link below.  In conjuction with that conversation, I purchased "Land Trusts for Privacy and Profit" by Florida Attorney Mark Warda 2009.  Basically there is a lot of gray area when it comes to Land Trusts.  There hasn't been much use of them, or enough specific statutes written by a states legislature to really know full hand what will happen in the event your Land Trust was brought up on charges.  What i did find out through my research is that A Land Trust is not an entity it is an agreement.  It does not file taxes, have a federal ID number or any of that stuff the bank was asking for in my instance.  I'm almost a 100% i would make an offer as an individual "Pete Vigliotti, Trustee of 123 Main St Trust, dated March 16 2014"  If they wanted to see the trust documents, I would show them my trust agreement.  In my case I would label myself as Trustee, and my LLC as beneficiary, the trust document does not have to be notarized or witnessed according to Warda (2009).  I would then assign my beneficial interest in the contract to my end buyer once i found one if i had the property under contract.  I'm going to check with my attorney this week hopefully to get more inside this transaction but I'm getting close to some real answers.  Hopefully my lawyer has done enough research/and actually had practice with wholesalers using this tactic...
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By RyanPal
#854 [quote="petevigs1265"]
Some updates:  I commented on a Land Trust video by Colorado Attorney Bill Bronchick.  He commented back and we had short conversation about my situation.  You can watch the video by using the link below.  In conjuction with that conversation, I purchased "Land Trusts for Privacy and Profit" by Florida Attorney Mark Warda 2009.  Basically there is a lot of gray area when it comes to Land Trusts.  There hasn't been much use of them, or enough specific statutes written by a states legislature to really know full hand what will happen in the event your Land Trust was brought up on charges.  What i did find out through my research is that A Land Trust is not an entity it is an agreement.  It does not file taxes, have a federal ID number or any of that stuff the bank was asking for in my instance.  I'm almost a 100% i would make an offer as an individual "Pete Vigliotti, Trustee of 123 Main St Trust, dated March 16 2014"  If they wanted to see the trust documents, I would show them my trust agreement.  In my case I would label myself as Trustee, and my LLC as beneficiary, the trust document does not have to be notarized or witnessed according to Warda (2009).  I would then assign my beneficial interest in the contract to my end buyer once i found one if i had the property under contract.  I'm going to check with my attorney this week hopefully to get more inside this transaction but I'm getting close to some real answers.  Hopefully my lawyer has done enough research/and actually had practice with wholesalers using this tactic...
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Thanks for posting back with your findings.  that's what makes this forum awesome!  :banana :banana

we'd love to hear about your real world experience once you submit your docs back to the bank.

will check out the video...bill is got some great stuff out there and is up to date with the latest laws etc. (ie/ Dodd Frank)