Should Private Lenders Go On The Deed

Should Private Lenders Go On The Deed

A common question from my coaching students ask is “when working with private lenders, who goes on the deed?”

In this short video I answer that common question and the answer depends a little bit (of course).

Sometimes it may make sense for your private lender to be on the deed and other times it makes no sense to be on the deed.

cash flow idea

The best benefit a private lender being on the deed and owning the property is the tax write off in the form of depreciation.  This is a great benefit but if your private lender is a self-directed IRA with no UBIT (Unrelated business income tax) then it does not file a tax return and gets no benefit from the depreciation anyways.  Capturing depreciation can nicely boost overall ROI and sometimes it may make sense to be on the deed with the investor.

The risk of ownership is primarily liability.  Lenders don’t get sued with a slip/fall, dog bit, etc claim but the owner of the property can be sued.

The deed conveys ownership of real estate and being on it has benefits along with additional risks and exposure.

Let me know your follow up questions and thanks for watching this video segment.

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