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KN
rn
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Stuck with two rental properties? Will a land trust help?
Tuesday, March 04 2008 10:55 PM
We acquired two rental properties from a real estate investment firm that just recently folded. We are left with two townhouse rental units that are currently being rented, but the rent does not even come close to covering the mortgages. We were advised to place these properties into land trusts to protect our own home in case we couldn't keep paying on these rentals. Is it legal to place property into a land trust if you think you may be forclosing on the property? Don't get me wrong...we don't want to foreclose; we have a perfect credit score and we are deathly afraid these properties will bankrupt us and ruin our ability to build a new home in a couple of years. Thanks, KN
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Randy Hughes
SFH Master Advisor
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Re:Stuck with two rental properties? Will a land trust help?
Wednesday, March 05 2008 12:52 PM
KN,
SEE MY COMMENTS BELOW IN BOLD.
RANDY
We acquired two rental properties from a real estate investment firm that just recently folded. We are left with two townhouse rental units that are currently being rented, but the rent does not even come close to covering the mortgages.
PLEASE CONSIDER REFINANCING NOW TO LOWER YOUR PAYMENTS. INTEREST RATES ARE VERY LOW AND PROBABLY WILL NOT GO MUCH LOWER (FOR INVESTMENT PROPERTY SUCH AS YOURS).
We were advised to place these properties into land trusts to protect our own home in case we couldn't keep paying on these rentals. Is it legal to place property into a land trust if you think you may be forclosing on the property? YES, IT IS LEGAL BUT THIS ALONE WILL NOT PROTECT YOU...IT WILL JUST SLOW YOUR CREDITORS DOWN (WHICH MAY HELP YOU NEGOTIATE A BETTER SETTLEMENT)
Don't get me wrong...we don't want to foreclose; we have a perfect credit score and we are deathly afraid these properties will bankrupt us and ruin our ability to build a new home in a couple of years.
IT IS DEFINITELY A GOOD IDEA TO PUT YOUR PROPERTIES INTO A LAND TRUST FOR MULTIPLE REASONS (SEE OUR FREE REPORT ON 32 REASONS TO USE A LAND TRUST AT): http://www.realestateforprofit.com/pg/files/reports/default.aspx
IN ADDITION, PLEASE LOOK FOR ADDITIONAL WAYS TO SOLVE YOUR PROBLEM AND SAVE YOUR CREDIT SCORE:
1. REFINANCE FOR A LOWER PAYMENT
2. SELL A 1/2 INTEREST TO ANOTHER INVESTOR TO SHARE IN ANY NEGATIVE CASH FLOW
3. TALK TO THE TENANTS ABOUT LEASING THE PROPERTY AT A HIGHER RENT IN EXCHANGE FOR AN OPTION TO BUY FROM YOU.
4. ATTEND OUR MIDWESTREA INVESTMENT CLUB MEETINGS TO TALK TO OTHER INVESTORS ABOUT EITHER BUYING THE PROPERTY FROM YOU OR IF THEY HAVE HELPFUL IDEAS FOR YOU.
Randy Hughes
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