If you’re buying properties at auction, you run the risk of inviting costly lawsuits for each and every property you purchase, from something as simple as a dispute over property lines to potentially attaching liens. Even if these lawsuits are frivolous and without foundation, the cost involved in defending yourself is prohibitive and damaging.
The benefits to having a trust or LLC in which to own your tax deed properties are multiple:
- Discourage potential lawsuits and risks by concealing the identities of the equity principles (you and/or other controlling members) involved.
- Both a trust and LLC allow anonymity and leverage during negotiations.
- Wealthy individuals often close transactions through trusts in order to mask their identity.
- If you’re buying/selling multiple properties in a given area, doing so through separate trusts can allow you to retain leverage by not tipping off potential buyers/sellers (Walt Disney bought up land for Disney World this way).
- Both Trusts and LLCs provide easy transference of equitable interests, and if written correctly, can avoid probate or Florida transfer taxes upon the death of a principal.
There are advantages to not closing transactions in your personal name, so consider setting up a trust or an LLC to provide additional layers of security! Schedule a free attorney consultation if you have more questions about business entities.
Visit our YouTube channel to see our principal attorney address related topics of interest in our ongoing educational video series: Tax Deed Law Made Simple.
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