As we said in earlier,when you close escrow on a piece of property, the grant deed or warranty deed is recorded at the county recorder’s office. This Deed becomes part of the Public Record. This means anyone in the world can get on the Internet and find out who owns that property.
This can be a bad thing because you tip your hand to property owners of property you still need to tie up, making your remaining property purchases very expensive. It can also tip off other real estate investors who could then become your competitors.
Lawsuits, Creditors, Divorce, IRS Liens Aside from tipping off surrounding property owners and potential competition, there are four more important situations when it may be in your best interest to use an option contract to protect your privacy.
These include being involved in a lawsuit, going through a divorce, being hounded by creditors, and having the IRS on your case. You can’t stop being a real estate investor because of adverse financial circumstances that come your way over the course of a lifetime. If you live long enough, the odds are good you will experience one or more of these situations.
We personally have experienced all four of these situations at one time or another. When you own real estate, you are a target. Attorneys file lawsuits against people they think have assets worth going after. Attorneys take on clients for a percentage of the money the attorney can win in court.