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Foreclosure Forum |
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Re: Structure of foreclosure vesting.In Reply to: legal structure of partnerships posted by william hoyman on July 29, 2001 at 12:05 AM : What is the best legal entity to use for real estate investment deals? (in your opinion). I have a C corporation already and I am about to embark on partnerships with two different people. They will be money/ advice partners and I will be doing the majority of the work. Is my corp. sufficient to utilize for the partnerships (as a partner itself)?, or should we set up L.L.C.'s or L.L.P's for each deal? Thank you for your respoonse. : We are all in California and the deals will be in L.A. and San Diego... =•=•=•=•=•=•=•=•=•=•=•=•= William, when buying foreclosures one contemplates doing a lot of them, flipping them for profit as fast as possible, especially in this hot bed of Southern California. Therefore most of the pros here in San Diego, and also Orange County, use the title holding trust format to hold title to their properties since it costs nothing to create the trust and it’s use doesn’t require that payment of $800 yearly to the State Franchise Tax Board. For the benefits of a low profile, no cost, ease of creation, diversity and liability containment most of us want to use a separate trust with each foreclosure purchase. I particularly like to hold title in the trust, with a single LLC as the trustee and beneficiary of all the various trusts. That way you achieve the undisputed protection of an LLC and use it in conjunction with an untold number of different trusts. So you end up just paying one $800 yearly fee to the state for your master LLC , neatly avoiding paying thousands and thousands of dollars in superfluous fees. When you have partners, why not have each one create their own LLC. Then their different LLC’s would own their prorata share of the beneficial interest in each trust. Your LLC would be the trustee of all the individual trusts and would execute a separate Foreclosure Joint Venture Agreement with each partner’s LLC. Hope this helps.
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