Mark Ferguson: Podcast 68 Protecting Your Real Estate Assets with Land Trusts Featuring Randy Hughes

Posted on Oct 4 2016 - 9:51pm by Lance Edwards



Randy Hughes is my guest on this weeks episode of the InvestFourMore Real Estate Podcast. Randy grew up poor, but found real estate when he was in college. He began investing in single family rental homes and has since bought over 200 houses. Randy learned about the best ways to protect his real estate assets along the way using land trusts. In fact, some call Randy Mr. Land Trust because of his vast knowledge on the subject. Not only does Randy teach his techniques online, but he has taught classes at colleges and is licensed to teach with the Illinois Association of Realtors. On this episode Randy gives us a lot of information on why land trusts are such a great tool for real estate investors as well as many other tips to protect investors.



How did Randy get started with real estate investing?

Randy grew up very poor with an alcoholic father. He worked hard to attend college and was the first person in his family to graduate from college. While in college Randy started to learn about real estate investing and rental properties. He was actually able to buy his first property when he was 19 by assuming a loan and putting $800 down (at the time his life savings). By the time he was done with college he owned three rental properties and was ready to move on in his real estate investing ventures. He started to invest in commercial real estate by purchasing office buildings.

As Randy’s portfolio grew, he realized all of his properties were in his name, he had no privacy, and was an easy target for litigation. When this was happening a few decades ago, LLC’s had not been invented yet. Randy discovered land trusts and how they could protect his properties.

Should you use a LLC?

How do land trusts help protect your real estate assets?

I have all of my rental properties in a separate LLC. I am in Colorado where LLC’s are very cheap and easy to set up. LLC’s help with liability and protect you from some liability, but nothing is bullet proof. In some states it can cost hundreds of dollars a year to maintain LLC’s. It is also pretty easy to look up the owner of a LLC if you are worried about privacy. Land trusts are usually much cheaper to set up than a LLC and you do not have to register them with the state. It is much harder to find the owner of a land trust and you can set up land trusts in conjunction with LLC’s in multiple states to provide the ultimate protection.

How can a land trust save you from bad partners?

Randy tells a story on this podcast about a chopping center he bought with a friend many years ago. The friend did very well financially until the real estate crash, where he lost millions. The friend had millions of dollars of debt he could not pay. Because Randy and the friend had their commercial property in a land trust, the liens could not attach to that property.

Land trusts can also make the estate planning process much easier. Instead of an estate going through probate, land trusts will allow property to pass directly to the heirs.

How can you learn more about land trusts?

Randy has put together coaching programs and live seminars to teach others how to use land trusts. You can get more information on Randy’s teaching here. There is much more information on how to protect yourself in this podcast so make sure you listen to it or read the transcript. He also talks about why you should always use a P.O. box and should own properties individually with your spouse instead of together.

Build a Rental Property Empire is on sale at Amazon

The paperback version of Build a Rental Property Empire (my book) as of this article was only $12.82 on Amazon. Amazon runs their own sales and this is the lowest price it has ever been. Amazon runs sales on the best performing books.




[0:00:58.8] MF: Hey everyone, it’s Mark Ferguson with Invest Four More, welcome to another episode of the Invest Four More real estate podcast. Very excited to talk to Randy Hughes today who is known as Mr. Land Trust. I’m sure many of you have heard of Randy or at least heard his name in the industry but he specializes in land trust, privacy for investors, protection of their assets with land trusts. He’s bought hundreds of houses himself, he also teaches at some local colleges in Illinois, very recognized speaker, teacher. Randy, thank you so much for being on the show, how are you today?

[0:01:33.4] RH: I’m great Mark, thanks for having me, it’s my pleasure.

[0:01:35.7] MF: No, I appreciate it. I’m always excited to talk to guests and people I haven’t talked to a lot in the past and especially learning about new subjects. I know some about land trust but I’m definitely not an expert. So I’m really happy to have you on the show and I’m sure I’ll learn a lot as well as my listeners as well.

[0:01:52.4] RH: Yeah.

[0:01:53.5] MF: So I always like to start off getting the background, the history of how you got started in investing and so I was hoping maybe give us a little history, how you got into the investing world and how you got to where you are now.

[0:02:07.1] RH: Well, it is kind of a rags to riches story. My father was an alcoholic, he deserted my family when I was 16 years old, left me and my mother and my younger sister to fend for ourselves. My two older brothers had gone off to the service and it was pretty rough for a while. But my mother was smart enough to realize that the only way we were going to break out of this cycle of poverty was to get me educated. So I was the first person in my family to graduate from college and while I was in college and studying business, I was reading and studying about apartment buildings.

I thought, “Wow, that would be great if I could someday own an apartment building,” and that kind of peaked my interest in real estate. The problem was, buying an apartment building took a lot more money than buying just a little single family house. So I started in college buying single family houses. When I was 19 years old, I bought a small two bedroom, one bath, just a little 800 square foot house that I assumed a loan, it was a VA loan. That was back in the day and you need to assume a VA loan without being a veteran, for 35$ assumption fee.

So I paid the current owner about $800 which is my entire life’s savings to balance to his loan balance from the purchase price to his loan balance, the difference is about $800 and I took over his loan and I rented the house out to other college students. By the time I graduated from college, I owned three houses and then I bought a small office building after graduation and just started snowballing those equities into more and more property. And it was probably after I had about 15 houses, single family houses in my name personally that I woke up to the fact that anybody could look up what I owned in the courthouse records.

That scared me, and I thought, “Well this is not smart at all.” It’s like taping a financial statement to your back and walking around in public and have everybody realize and look to what you own and what you owe and what it’s worth, all that stuff can be determined pretty closely by analysis of the county recorder’s office records. I started researching ways to hold title to real estate other than in my name personally.

Of course, there’s corporations and LLC’s. Of course, there were no LLC’s that time but corporations and partnerships and whatnot and I discovered the title holding trust, often called the Illinois Land Trust only because Illinois is kind of the granddaddy of land trust law. The first land trust was formed in the Chicago suburbs over 100 years ago, so there’s a lot of case law history and experience here in the state of Illinois.

So I discovered that as a title holding trust and so I moved everything out of my name into land trusts. Each property went into a separate trust because I also learned that it makes no sense to hold title to multiple properties in any one entity, be it a land trust, an LLC, corporation or any other entity because then you’ve just created a nexus for a lawsuit. So if they get one property and you’re holding it, and let’s say you got 10 properties and one LLC and you have a legal issue arise on one property and they get it through the legal system, they’re going to get all 10 properties because they’re all in one entity.

So it’s smart to hold title to each property in a separate trust then just because you put your property in land trust doesn’t mean that there’s no liability on the property held in the trust. The liability on the property held in the trust flows through to the beneficiary. That’s why most of my students will make the beneficiary to their land trust, the corporation or an LLC to give them additional asset protection. So after converting everything over from my name to those trusts from that point on I never bought anything in my name again. Everything was purchased directly from the seller to the trust so I was never in the chain of title.

There are a lot of great legal reasons to do this that we really can’t get into this short of an interview but sufficed to say, if you can stay off the title to real estate, you’re doing yourself a favor. In fact Mark, there are no benefits to owning real estate in your name. None, zero. All the benefits of owning real estate, you can get by holding title in a trust because everything flows through the beneficiary, all tax benefits through the beneficiary. You’re not giving up anything except the public awareness of your property, and that’s a good thing to give up.

So if there are no benefits to owning a real estate in your name, why do it? That’s my theory, why do something where there’s no benefit? Their obvious benefits to doing it another way and so I put each property I buy in the land trust and that’s not only for privacy but there are some asset protection benefits. Now land trusts aren’t great asset protection tools by themselves but if they do give you anonymity, which is really the first step to privacy and asset protection and getting your name off things that are in the courthouse records and cutting public awareness of what you own.

Like or not, our legal system is devolved into a system where jealousy prevails and in fact I was reading an article the other day that said, one of the top five ways of American’s goals of becoming rich is to sue somebody. That’s just sick. It’s just crazy to think that they don’t want to work hard like you and I have done, They want to take the shortcut and sue somebody that’s already worked hard and take it away from them. So when we’re dealing with that kind of mentality and continuously see lawyers that will sue you without being paid by their client until they get you, you’ve really got to defend yourself and be proactive in defending yourself.

You can’t buy insurance on your house after it’s caught on fire. I run into this a lot in my speeches. I speak all around the country mainly to REIA’s, Real Estate Investment Associations, and more often than not, people say, “Oh well that’s great, I’ll do that in the future, I’ll get around to it.” And then six months later I get a call from somebody saying, “Well, I think I’m going to get sued next month, what do I do now?” I say, “Well, pray a lot because that’s about all you can do. You can’t retrofit. You have to be proactive when it comes to asset protection and privacy issues.”

[0:09:09.2] MF: Yeah, that makes sense. I’m curious on, you mentioned not having any benefits, I’ve got my 14 rentals now, I sold a couple this year and I’ve got each of those in their own individual LLC for protection. A lot of people see me doing that and ask about that but one of the downfalls to that is if you want to get conventional financing with an LLC, you pretty much can’t do it, the banks won’t lend to a corporation. My local portfolio lender will loan to me but they’re pretty unique and they’re not always easy to find. But I have always heard that land trusts may be a way to get around that, is that right?

[0:09:48.3] RH: Well, not really. It depends on what state you’re in and what lender you’re dealing with. But for example, Bank of America, they will loan directly to a trust in Illinois, on property in Illinois. But I know your listeners are all over united states so that’s not going to be very helpful for those people not in Illinois. However, what you’re talking about is the difference between a loan that has to qualify in the secondary market versus a loan that doesn’t, portfolio loans you had mentioned.

Bank of America will only allow you to have four loans and they’ll cut you off. So if you’re very active in this business, you don’t have much of a choice but to find a portfolio lender sooner or later. I say get all those secondary market loans you’ve been stand or that they’ll give you because they’re great loans and go ahead and close in your name and then deed out your name into your trust.

But like I said, some banks will go up to 10 I’ve heard, but most of them are limited around four or five and once you got those loans in the books, they’re not going to loan you any more money, at least that’s qualified in the secondary mark. You just kind of solve your own problem, after you get up to more than four loans then you’re going to have to go to a portfolio lender and they will let you close directly from the seller to your trust.

[0:11:10.0] MF: Right, and that’s what I’ve always done too. One thing too that I know a lot of people are worried about with the LLC, if they buy a secondary loan that you can sell on the secondary market and then they transfer to an LLC after they buy it, that could perhaps trigger a due-on-sale clause. I know it’s really rare but I have heard of someone who had four or their properties, the bank said, “We’re initiating the due-on-sale clause because you transferred them to your LLC.” Would that happen with a land trust as well? Could that be considered a sale?

[0:11:42.5] RH: Yes, it could be but it depends on what type of property you’re talking about. The Garn–St Germain Act of 1982 provides that all Americans have the right to put their property into a trust without triggering to due-on-sale. That applies to up to a fourplex, so if you have a fourplex and you live in one of those four units, you could transfer that whole property into a trust and not trigger the due-on-sale. But if it’s just a single family rental property, technically you would be violating the due-on-sale if you transferred it to a trust, even making yourself a beneficiary of the trust.

However, I’ve found that it’s not been an issue with most of the lenders I deal with. I don’t deal with Bank of America and Chase and all the big boys that have got too many rules that I don’t like. Dealing with those portfolio lenders, often times I just go to them and say, “Hey, I want to put this property into trust, I’m doing some estate planning, do you have a problem with it?” And every one of my lenders had said “no.” They understood the reason for the estate planning and said, “No, thanks for telling us but it’s all right with us.” That due-on-sale clause, if you read it, is an optional thing. It can be triggered by a lot of things, one of which is if the lender deems himself insecure.

This is one of the terms of that due-on-sale clause. What does that mean? Well that means, if you’re in a party and you had too much to drink and you’re talking to your friend and your banker’s standing behind you and he overhears you tell your friend that you think you’re going to have to take bankruptcy Monday morning, the banker goes in Monday and calls that loan due because he just deemed himself insecure.

So there are lots of ways of looking at this but the bottom line is, I’ve not found it to be a problem, most of my students just go ahead and deed into these trust and the lenders never even know about it, as long as they keep making their payments, the lenders are happy because they’ve got enough problems with people that aren’t making their payments. So it really is kind of a non-issue as far as my experience goes.

[0:13:51.2] MF: Okay, yeah. No, that helps and then the same with me too. Using my portfolio lender, I know there’s national portfolio lenders out there, rental property lenders who will only lend to an LLC so you don’t have a choice. They may lend to a land trust as well but they don’t want to lend to an individual person on the rental properties. So that makes sense for me.

So obviously the asset protection, the individual privacy is a huge benefit to land trusts and the thing that always pops into my head when I hear about land trusts and having a beneficiary and LLC is it seems kind of complicated. Is it pretty complicated to set up or is it something once you figure out is not too hard?

[0:14:34.3] RH: Well it’s certainly not near as difficult as setting up all those LLC’s you talked about, and a lot more cost effective. Even if you set your LLC up in states that are cheap let’s say to establish. It’s a lot of paperwork, it’s a lot of expense, it’s an annual recurring expense. Land trusts are not registered anywhere on planet earth. They have no registration fees, no registered agent fees, no registered agent fees, no franchise taxes. They are basically free to setup. So the key is to, once you have the knowledge and the forms to create a land trust, you’ll create them the rest of your life.

I’ve created hundreds and hundreds of land trusts at no cost. So that’s pretty hard to beat especially the fact that it’s not registered anywhere, it’s really the last entity out there that isn’t tracked by the state or federal government and a lot of you privacy folks out there listening to this, I hope that perks your ears up. Because if you’re operating at a level, think of it like this, we’re all submarines going across the ocean here and when you put your property on the land trust that submarine dips below the surface and all of a sudden it can’t be tracked visually.

So we’re taking it down below the surface, operating off the grid, off the radar screen and we’re not doing that because we’re trying to do something illegal or fattening or immoral, we’re doing it to protect our hard earned assets. We work hard for this assets, we do it for not only current cash flow but the future of our family and a college education for our kids and believe me, if you’ve ever had that stolen from you by somebody, you’ll look at life a lot differently and I can give you a whole bunch of examples. But let me just give you one right now to exemplify how important this can be.

35 years ago, I bought a shopping center with a friend of mine. I insisted on putting it into a trust. We did that 35 years ago. In the year 2000, my friend moved from my town here in Illinois to Florida and became a big-time real estate investor that was very successful, made millions of dollars until the crash of 2008. Then he started losing millions of dollars. Last august, the August of last year, 2015, I was at my computer, I get a weekly report of everything that’s recorded in my courthouse, marriages, divorces, liens, judgments, tax liens, if you buy a house, you sell a house, I got all that information emailed to me by a local service here in town.

So I’m sitting at my computer looking at the liens and judgments and I see my friend’s name pop up as a lien against him by a bank in Florida for $3.2 million. Now, I just sat back and smiled as opposed to sitting back and crying because if we would have bought the shopping center 35 years ago in our names personally and that lien hit the county where we live here and where the shopping center is, his $3.2 million lien would have immediately attached to our property. Which means I would have lost 35 years of investment, of management, of hard work, of sacrifice, all because of something somebody else did and that is a true story.

You can see how important this is. This is an extremely important issue. If you’re going to be an investor, not only take time to learn how to invest but learn how to protect those investments in the long run or you may be working a whole lifetime for somebody else.

[0:18:31.9] MF: Right, that’s a pretty intense story. I’m curious, the bank could not lien on that property because it isn’t a trust, but could they — do you think they even knew he owned it because of the trust?

[0:18:44.2] RH: They might have but they would have to sue him and got him in the court on a citation to discover his assets and found out through that discovery process that he was the beneficiary of the trust. But they still couldn’t lien the property in the trust. You can’t do it. They can go after him and they could go after his interest in the trust but they couldn’t lien the property, and that is a huge difference.

[0:19:09.6] MF: Right, yes. Because if they go after him personally, it has nothing to do with you but if they lien the property then that’s obviously your property.

[0:19:17.6] RH: Yeah I’m dead. iIt’s a head shot to me and boy, you live through a few of those moments in life and you realize just how important this subject is.

[0:19:27.3] MF: Playing off of that, what about contractors? Because I’ve had properties where contractors have just either done horrible work or not finished their work and then they come back and say, “Oh I’m going to lien the property because you didn’t pay me.” It’s like, “Well you didn’t do the work, why must I pay you?” Would a land trust protect against that as well?

[0:19:46.1] RH: Well that’s a little different. You can’t put your property in a land trust and then go out and hire a roofer to put a new roof on and not pay him because he could lien the property for a contractor’s lien because he worked specifically on that property. So there are some types of liens like I just described that can be applied but in general, liens and judgments against the beneficiaries of the trust will not attach to the property in the trust.

[0:20:16.2] MF: Okay, that makes sense. So very important and yeah, I’m not suggesting people to find a way not to pay their contractors obviously. That’s not a good way to do business but okay, very interesting. Now, you mentioned estate planning as well. Obviously, there’re some benefits to land trusts for estate planning, can you go into a little bit of detail on that side of it?

[0:20:36.8] RH: Well, I can. Firsthand experience there. I’ve been in this business 44 years so just about everything that can happen to me has happened. But one of the big benefits of putting your property into a trust is the fact that upon death of the beneficiary, the interest passes directly to the successor beneficiary outside of probate. Probate is a legal procedure that you have to go through when someone dies if they have a certain amount of assets.

What probate does is it exposes everything you are transferring upon your death to your heirs, to the general public, it’s all made public information. That’s why when movie stars and rich people die, you never find out about what they own because they’re smart enough to not let it go through probate, everything passes under cover of the legal system through transfers like what I’m describing.

So the benefit to that is let’s say that you own a piece of real estate and it’s throwing off cash flow that you’re living off of and you die, if you own the property in your name, that property is going to be tied up for six months to a year in probate and your heirs may need that money to live off of, buy groceries with. Whereas if you have the property and the trust and you die, immediately upon your death, your successor beneficiary, let’s say your wife or children, become the beneficiary and they have immediate control of the trust and the funds coming into the trust.

So it’s a great estate planning tool. Not by itself, you do need to couple it with some other tools. But I can tell you this, I was married for 41 years to the same woman and she died about a year and a half ago. Everything that she owned, all of her properties were in separate trusts and they all flowed down to LLC’s and flowed on down to her living trust. And everything was very smooth, very easy on me, we didn’t even file an estate affidavit because her estate was not large enough because everything flowed outside of her estate through these trusts.

So they really do work and while we’re on the subject of being married or having a significant other as the case may be, it’s my opinion that you should have your assets and your spouse or significant other should have their assets and you should not own any of those jointly. She’s got her trust that she owns 100% and you’ve got your trust, you own 100% of. Because if you mix assets and something happens in your life, you have a bad deal or some guy falls off your rehab and kills himself or worse yet, injures himself, he’s paralyzed for life and you got a multi-million dollar settlement that exceeds your insurance coverage, that happens all the time.

So don’t think that insurance is going to save your butt because it’s good to have it and I advise you to have it but don’t rely on it 100%. Because they have limits on insurance and if you read those policies, there’s a lot of exceptions to the coverage on those policies. So you need something beyond insurance and that is some asset protection. So keep your assets separate from everybody else on planet earth, you got your stuff, they got their stuff and never the twain should meet.

[0:24:03.2] MF: That makes. A lot of sense and even in my situation where I own all my houses individually in an LLC, maybe it would even be smart to deed half of my properties to my wife and put them in a trust, just in case that situation you talk about where if someone did come after me and somehow they got through all my LLC’s and insurance, they don’t get everything, they just get maybe half.

[0:24:30.6] RH: That’s exactly right. My theory was, I can survive on half but I can’t survive on zero.

[0:24:35.6] MF: Right.

[0:24:38.3] RH: Let’s go back to your statement Mark about the LLC’s. In a perfect world, you’d have maybe a separate LLC for each property but that really gets cumbersome and obviously, LLC’s are registered at the state level and you can look up and see who owns them. So I don’t like to expose the beneficiary in my trust even though they’re generally LLC’s, I don’t want to expose them to the public records either and so that’s why I use this trust because you can make them beneficiary of the trust your LLC and there’s nothing made public stating that.

And, you don’t need 14 LLC’s. You could have one serious LLC for example, be the beneficiary of multiple land trust and only have to operate that one LLC but still have the separation of liability at the LLC level in series LLC. If any of your listeners are curious, they can Google series LLC to look into the possibility of using one of those.

[0:25:43.5] MF: That brings up a question that I have too. I know Texas has series LLC’s but not every state has those. When you’re setting up an LLC in the land trust, does it matter what state these are being set up in and where you reside?

[0:26:00.3] RH: Great question Mark, great question. I live in Illinois, all my investment properties are in Illinois. I do not use Illinois land trusts. Here’s what’s interesting, there’s no federal land trust law. It’s all state by state and some states have better laws than others in my opinion and they are only six or seven states that actually have a land trust statute on the books. The rest of them recognize the validity of a land trust but don’t even have a specific land trust statute.

So I like to use states that have specific land trust statutes to form my trusts in. For example, Florida, Virginia, those are two states that have really good land trust statutes. You’re in Colorado, so you could form a Florida Land trust to hold title to your property in Colorado and if you’re talking to a series LLC, there’s an issue about single member versus multi-member that we don’t have time to get into now but in my opinion, Delaware, Wyoming and Nevada have the best single member LLC statutes. So let’s say you form a Delaware LLC to be the beneficiary to your Florida land trust that’s holding title to the property in Colorado. That’s getting pretty convoluted, wouldn’t you say?

[0:27:20.3] MF: Yes.

[0:27:22.8] RH: But what we’ve done there, Mark, is now we’ve drawn three states laws in on one issue. So if you’re going to sue this trust, you have to sue the trust in the state where the beneficiary is. Well, the beneficiary is in Delaware because it’s a Delaware LLC and you have to follow the laws of Florida trusts because you formed a trust in Florida. Properties in Colorado, so you can see just how convoluted, how complex this is and all we’re doing is we’re raising the bar for your adversary to make it more difficult for you to be sued for a frivolous lawsuit.

Again, I’m not talking about avoiding our just responsibilities in life. I’m not talking about stiffing people for money, I’m talking about protecting your hard-earned assets that you and your family has sacrificed for and avoiding frivolous lawsuits, not real lawsuits but frivolous lawsuits that take time and money to defend and deal with.

[0:28:22.1] MF: That makes sense, and yeah I can imagine if I was going to sue somebody and I saw that line, that chain of things you have to go through, I’ll be like, “Well, maybe I’ll just look for somebody else.”

[0:28:32.5] RH: Well, Mark, what’s going to happen there is they’re not going to see that line until they’ve spent a whole bunch of legal expense to get to it. The only thing they’re going to see is the title of the property is owned by a trustee, that’s what’s going to show on the public records. So that’s what they have to sue.

So they’ve got to find the trustee to sue them and if they refine the trustee to sue them then they’ve got to, they do that just so they can get after the beneficiary because the trustee has no personal liability. So they sue the trustee to get the trustee on the stance to tell them who is the beneficiary, who is the party to be sued here? That’s the the beneficiary. Okay, now after we’ve spent $10 grand and six months to a year finding that out, all we find out is the beneficiary is an LLC in Delaware. So now we’ve got to go file in Delaware against this LLC.

So you see, it raises the bar and makes it more expensive and when you cross state lines in a lawsuit, in other words, it’s not a state issue, it’s a federal issue, you have the right as the defendant to petition to go to federal court. Federal court raises the bar even higher because you’ve got to have a smarter attorney that understands federal court rules that are going to charge you more money and in fact, he may even hire one of his brothers of the law in these other states to research Florida trust law and Delaware LLC law.

So you may end up in two or three lawyers just to keep chasing me. By the time you get to me, I’m probably not going to be where you think I am and it’s probably going to cost you a whole lot more to get beyond that point. So it’s a shell game and it’s one that we use to ward off the frivolous lawsuits and basically what happens is they’d give up early on because they see it’s not going to be easy, it’s not going to be expensive and they go after the low hanging fruit and that is the real estate investor that holds title in his personal name who is easy to sue in state court, in town and grab him and run with his equity and go on to the next sucker.

[0:30:42.7] MF: That makes sense and with federal court too, they won’t take every case, will they? Doesn’t it have to be a pretty cut and dry like there are grounds for the lawsuit, correct?

[0:30:54.2] RH: Right, you have to petition as the defendant to take it to federal court and you may or may not win but it’s just another issue. It’s kind of like running track, Mark. In high school, if you ran track, the guys who ran around the track the fastest were the ones who didn’t have any hurdles. If you put up a couple of hurdles, it slowed those guys down and that’ unfortunately, call me a cynic but that’s how our legal system works.

OJ proved to us, it is not about who is right and who is wrong, who is guilty and who is innocent, it’s who’s got the smartest attorney, who’s got the money to buy the smartest attorney to work the system. So we’re just putting up hurdles to protect our hard earned assets.

[0:31:37.1] MF: That makes sense and obviously, there’s quite a few things to think about beneficiaries, LLC, land trust, where to set it up and you help your students, you help people figure all that out, correct?

[0:31:51.7] RH: Well I do, I teach colleges once a year. I teach a live seminar, in fact, I’ve got one coming up in Oklahoma city in October. But I also sell a home study course and it comes with DVD’s of me teaching the same material to a live audience. So it’s like getting a seminar and a home study all in one. I wrote it personally and everything in the course I’ve done, so it’s not a bunch of hyperbolae and it’s designed to teach the real estate investor how to create a land trust, provides all the forms they need and once they learn how to do it, they’ll never pay another dime to anybody for the rest of their lives, they’ll be forming land trust at no cost.

So that’s a pretty cool thing. A little bit of knowledge and it’s not rocket science, my teachings are from one investor to another. So it’s easier to read, it’s not a bunch of legal jargon, and what’s interesting is, I answer my phone. And that sounds a little silly but I don’t know if you’ve tried to call any businesses lately Mark, especially after you bought the product, but boy it seems like there’s just hardly any after the sale service anymore out there.

Everybody wants you to go to their website and send them an email and all that but nobody wants to talk to you. I’m kind of old school. All my students have access to me on the phone or through email and on their forum to walk them through that first trust because once they get that first one under their belt, they’re off and running. But I do have some other services I offer my students. I’ve been teaching for the last 16, 17 years and using this trust for the last 35 or 40 years. So I’ve got a lot of experience to help them out and so they can avoid some of the pitfalls of real estate investing.

[0:33:49.3] MF: That’s great. I’m curious, you’ve bought rentals, you’ve bought commercial, kind of getting a little off-topic, but what’s your favorite investment right now for you personally? Is it larger apartments or commercial or what do you like right now?

[0:34:06.2] RH: Just single family homes. I discovered, I mean I’ve owned everything from restaurants to apartment buildings, to commercial buildings. But I found that my personality relates better to single family homes and so other than the shopping center I mentioned earlier, all my portfolio consists of single family houses.

[0:34:27.7] MF: I’m the same exact way. I love single family homes and people always ask me, “Some day you’re going to graduate to larger, multi-family apartment complexes?” And I’m just like, “No, I like my single-family houses right now.” It’s kind of like having an apartment building but just spread out over a bigger area.

[0:34:46.4] RH: I found that you get greater appreciation on a single family house than you do apartment building or commercial building because those values are determined by income and I don’t want my investments determined by how much they rent for, I want them determined by mom going in and seeing the kitchen and saying, “Oh I love this house, let’s make a full-priced offer,” which to me makes a big difference in return on my investment.

[0:35:12.0] MF: Yup, for sure. They’re easier to sell because like you said, you’re selling to owner-occupants who are always going to need a place to live. Where commercial properties, if the economy tanks, investors will stop buying and it can make things really tough.

[0:35:25.1] RH: They’re a lot easier to finance as well. So lots of good reasons there.

[0:35:29.4] MF: Yup, I know we’re getting off on a little tangent here but I was curious what your thoughts were on that.

[0:35:34.4] RH: Yeah.

[0:35:36.3] MF: Awesome. Well Randy, I know I’m going to have a link for people to get to your website on the show notes so that they can find you, talk to you. Maybe if they’re interested in your courses, they can get in touch with you there. Been a great interview. Do you have any tips, any last words for people who were thinking about doing a land trust or investing in general?

[0:35:57.4] RH: Well, let me first if you don’t mind, can I give out my email address?

[0:36:01.0] MF: Oh of course.

[0:36:02.6] RH: If somebody has a question, shoot me an email. I’m at, my email address is In summation I would say, don’t own real estate in your name, there’s no benefit. Hold title in a trust, consider the beneficiary to be an LLC or corporation. Don’t tell people what you own. Don’t use a street address, always use a post office box for everything and everybody. Just forget, go home tonight and pick an ax and chop your mailbox down, don’t ever use a mailbox again.

Find out from an investment standpoint, find out what meets your personality. I mentioned earlier that single family houses met my personality and I’m comfortable with that. Well, you may not be comfortable with single families, maybe you love apartment buildings. Well? Go after apartment buildings. Specialize, don’t spread yourself too thin trying to do it all because you’ll end up doing a bad job on everything instead of a good job on one thing.

So try to take that to heart and if you have any other questions or want to discuss anything else with me, feel free to send me an email and I’d love to talk to anybody that wants to talk. I enjoy helping especially real estate investors to succeed and protect their assets so they don’t get stolen away by the bad guys.

[0:37:32.6] MF: Nice, that’s great advice and I agree with everything you just said especially the focus part. I see a lot of people trying to wholesale, flip, buy rentals, do everything at once when they first start and it usually doesn’t work out well.

[0:37:45.2] RH: Yeah.

[0:37:46.0] MF: Well Randy, thank you so much for being on the show. I learned a lot myself and I may take your advice and I may be emailing you here too to talk about my personal stuff.

[0:37:56.9] RH: That will be fine, I’d love to talk to you.

[0:37:59.5] MF: Great job, really appreciate it. We’ll be in touch and yeah, have a great weekend coming up here.

[0:38:04.3] RH: Okay, you too, thanks, Mark, Buh-bye.

[0:38:06.5] MF: All right, bye.