After looking at the Florida Land Trust in detail, highlighting the many advantages and pointing out the possible little hiccups that could arise, it is always recommended that an investor friendly title company is used. Why is this important when property is held in a Florida Land Trust? Well, let’s look at this below in more detail.
Firstly, let’s discuss what a title company does and why you need them in the first place. A title company is there to facilitate and coordinate the interests of all parties involved in a real estate transaction, also maintaining the quality of the titles or deeds. They aim to research the title as far back as possible and establish that the chain-of-title is clean and that the property is marketable. In other words, the title company will find out if there are any liens or defects on the title and work to clear these, including any outstanding property taxes, HOA levies, or water services, false affidavits, undisclosed heirs, secret marriages or invalid divorces. This process of research is called an Abstract of Title.
Once this abstract of title is complete, the title company must then prepare a Commitment of Title Insurance, and send this to both the lender and the prospective buyer. These documents will list the problematic items that need to be corrected in order for the Good Title to be issued. The title company will work with the list to correct each item and complete all the documents. Once Good Title is given, the parties can go about exchanging documents and closing the deal with the issuing of the HUD 1 statement. This statement includes all the paperwork for conveying the title, securing the lender, and dealing with other issues such as current leases and rights-of-way, as well as detailing all of the incurred costs.
Over and above the title management duties, title companies are also responsible for drawing up the title insurance policies for the property, which can be either an Owner Title Insurance Policy or Lender Title Insurance Policies. The title insurance companies work closely with real estate agents and help to close sales, giving both parties peace of mind that their important and expensive investment will be insured and protected against any possible claims or lawsuits that may arise. The homeowner or investor title insurance is a once off payment and lasts for as long as you own the property. There are also no renewal premiums.
Why should you use an investor friendly title company? Well, by making sure that the title company is investor friendly, you can be sure that your title insurance is valid when you make simultaneous or double closings. Many title companies do not offer their services for these kinds of closings, associated with the use of a Florida Land Trust, and they might tell you that this is not possible or even that it is illegal.
To find investor friendly title companies, you would need to network with other real estate investors and find out who they use. The main real estate investor organizations in South Florida where you can attend meetings and discover who the big players are, including BRIC (Boca Real Estate Investment Club), DISTRESSED REIA (Distressed Real Estate Investors Association), and GCREIA (Gold Coast Real Estate Investors Association).
While many title companies shy away from Land Trust owned properties and real estate investors, those that are creative and think outside the box, will be able to provide ideal, completely legitimate solutions for double and simultaneous closings. This includes establishing a Florida Land Trust, so that you also have complete security and anonymity as a property investor. Independence Title, Inc. is a company that does provide these services in the State of Florida. We offer investor friendly title insurance and settlement services.
Wholesaling properties without using an investor friendly title company will be like banging your head against a brick wall. This is because many title companies have no idea about how to work around the assignment limitations on contracts and don’t understand how to use Florida Land Trusts and LLC’s to close deals simultaneously. It is not worth trying to explain it to them, so the best thing to do before you find an end buyer or even begin to make an offer on any property, is to first secure a reputable title company that specializes in double closings, simultaneous closings, and that is willing and able to work on deals for real estate investors.
This is very important to ensure that all the title documents are valid, and that they have been legally recorded and safely filed. This eliminates any fraudulent activities that might occur, and prevents problems later on down the line when the property is sold or placed into another Trust, or used for any other purpose.
A company that deals with real estate investors almost exclusively, like Independence Title Inc, always uses Florida Land Trusts to close deals, as they have discovered that it is the most effective and efficient way to handle short sales. They specialize in offering real estate professionals the ultimate solution to becoming referral magnets, and give investors the tools and support to thrive in the property market, where many others are struggling.