Got it


A straw buyer is someone who makes a purchase for someone else. The term is generally used when referring to bad or illegal transactions. For example, a person who purchases a gun for a felon is a straw buyer. In real estate, straw buyers are described as those who use mortgages to purchase real estate for other people.


The term straw buyer dates back to a basically a phony buyer in a deal.

It was used to describe a party that was as the same as putting a scarecrow (which was stuffed with straw) into the deal as a buffer between the real parties to a transaction.

It is not a term that automatically means an illegal activity. For example if I am assembling several parcels of property I don’t want the other owners to know I am the buyer of them all because the price will go up, so I use straw buyers and then have them assign the deal to me when I put it all together.

A famous example of Brian’s example - buying several parcels using straw buyers - was in the '70s when the Walt Disney Co bought a lot of parcels in Florida without anyone knowing it was Disney. They used the land to build DisneyWorld.

I guess they would’ve had to get all the properties under contract before assigning them. Since there were occupied homes, it must’ve taken a while to get everyone to sell.