Hi Ryan,
Now, if you have a distressed seller (wants to walk away from the property, divorce, death in the family, etc) do you really want to have to chase them down 2 years later when, perhaps, a tenant buyer is ready to qualify and purchase the house out from under you?? What do you do if you can’t locate them? Does that not ‘cloud’ your deal? I would think it would be much better to have the original seller out of the picture…and I think many sellers would rather leave their problems (cash flow problems) behind. Your thoughts are appreciated."
Good questions. First, for all intents and purposes the original seller IS out of the picture. He owns 10% of the trust which he agrees to dismiss when the tenant decides to buy. Seller receives all his agreed upon equity and his mortgage is paid off. There is never the need to chase him down. The paperwork authorizes the Trustee to sell the property if the tenant complies with all conditions.
Second, his credit is being improved by on-time tenant payments and he has no cash flow difficulty as his payment is being paid in full. In fact, he can take depreciation on the property.
Da Wiz