Recently I had lunch with a high-powered attorney in San Francisco. He charges $5,000 per land trust for his clients. He told me that there was an article in the local papers about Mark Zuckerberg buying a condo in the downtown San Francisco area as a place to stay when he is doing business in the SF business district. Mr. Zuckerberg’s attorney had advised him to put the title to his condo in an LLC, what was his attorney thinking is he an idiot? As the owner of the LLC, Mr. Z was still exposed to the public records and now the entire planet knows where Mr. Z’s second home is located. Dumb!
Be careful about taking advice from professionals
It pays to investigate and find out all your options before titling your real estate acquisitions. If Mr. Zuckerberg had asked me for my opinion I would have told him to title his condo in a Land Trust and make the Beneficiary of the trust his LLC. By structuring Mr. Z’s ownership in this manner, he would have avoided anyone knowing where his condo was located and given him (and his family) total anonymity of ownership.
Why is the privacy of ownership important?
There are a lot of crazy people out in the public domain and some of them would love to make a name for themselves when it comes to celebrities. We as real estate investors have an adversarial relationship with our tenants. Sometimes we must enforce lease terms and perhaps even evict a tenant. This activity can lead to extreme conflict and sometimes retribution on the part of the tenant. It makes good sense to NOT let the public know where you live or what you own. There are NO advantages to owning real estate in your personal name . . . only disadvantages. So, why do it? Use a Land Trust, you will be glad you did!
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