Real Estate Owners


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For many legal reasons, real estate investors and owners should never own real estate in their own name. Often when people are buying a property together, both or all the names of the owners are listed on the property as joint owners. When your name and/or your partners’ names are listed on the title, they are all recorded on the county records as the owners.

The Problem
Eventually one or more people are going to become unhappy or need to remove their responsibility for part of the mortgage and ownership. As joint owners, you all have the Right of Partition. This means that if one of you isn’t happy, that person can make everyone sell the property and divide up the proceeds. This kind of arrangement is pretty normal for partners of any business. When one wants out, his part of the business is bought from him or the business and sold and the partners are paid off.

Unfortunately, these things don’t always go the way you want them to. All it takes is one partner or co-owner to have a creditor or two that are overdue for their money. Once the creditors start demanding partitions, the property will have to be sold to settle his debt.

The Solution
A land trust is a legal entity that holds the property title and protects the interests of the property owners. Typically, a land trust is used to protect the owners from lawsuits, liens, liability, and litigation. One major benefit of putting a land trust as the owner of the property is the land cannot be partitioned. The beneficiaries, or actual owners, do not have the right of partition. This means if a partner wants out or his creditors demand payment, he can’t make everyone sell the property and pay him off. The land is now part of a business. Any of the other owners can buy the partner out, or he can sell his portion to another person. However, he does not need approval from the other partners to do so.

Real estate investment is a tricky game. The best thing for anyone to do is to set up a land trust and protect their assets. For more information on the exciting world of real estate investment or for real estate franchise opportunities, call or visit us at Homevestorsfranchise.com.

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