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Originally Posted by vreihen16
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Originally Posted by DETRoadster
I thought you said it was a "cash sale"? Ie, no bank involved. We paid cash for our property so a lot of the complexities you mentioned about banks being covered on their investment didnt apply.
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I'm also paying cash. When we bought our current house, the bank took care of the title/insurance details for us. Without a bank at the table this time, I want to confirm that I don't need to buy the "lender's" coverage in addition to the owner's coverage to have complete coverage.
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Tell us more about your LLC or trust idea. Why? What's the benefit? Too late for me but I'm curious about your angle. I assume it's some sort of risk mitigation?
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Trusts are used in estate-planning, where the assets are placed in a trust's name. If you want to change ownership, you can modify the trust without having to file deed/tax changes that cost $$$$ (and ironically voids your title insurance coverage). Plus, it allegedly avoids inheritance taxes in states/amounts where it is applicable.
An LLC is more frequently used in commercial real estate as a liability shield, so that claims against one property cannot go after others. I know that all of the commercial real estate investors here use them, and I have read that they are also used in some residential situations.
Anyway, since I'm not even positive that I will still be alive to build on this lot and we have no kids to inherit it, I want to consult with a RE attorney to see what makes the most sense with the possibility that I will be on the hook for liability on a piece of land that's a day's drive away from me that may wind up being flipped and never built on..... |
Got it. I don't think you'll need that extra coverage as there's no bank involved but let me know what you find out. Will be interested to see if I missed a step.
Dang, that's a great idea on the LLC. My wife and I both have LLCss. Dang.
I was also worried about liability on a property that out of sight and after consulting with my insurance company and a close friend who is in the insurance business I learned that if it's truly vacant (no structures of any kind) your current homeowners will cover you. As soon as you put up a shed, for example, you need a dedicated policy. We've got no structures on our lot so our homeowners will cover us, however, I used this as a good opportunity to finally get an umbrella policy in place just in case. I also put up "private property no trespassing" signs every 50 feet on all sides just so no one can say I didn't warn them.
