Has anyone ever used a land trust with owner financing? It would seem to me foreclosure would be pretty easy.
jb_bak,
As far as land trusts go, they are an extremely powerful strategy to create wealth. However the laws may differ from state to state.
We have just recently started purchasing property in Texas under land trust agreements. We got the agreement written up through an Attorney which is specific to Texas law.
Anyway yes they do work perfectly for pre foreclosures. The biggest problem i have with a land trust agreement is from an ethical/moral standpoint.
What you are effectively doing is taking over an existing lein on a property that the current owner cannot afford to pay. The Tittle Deed gets transferred into your name (through the land trust) but the loan is still in the name of the current owner. It is basically a “blanket” solution of the bank not knowing that someone else is taking over the payments and to them it looks as though the current owner is back on track.
Because you now officially own the property, you need to be 100% sure that you can afford to make the payments on the loan when it is not tennanted for example.
Otherwise not only will the property foreclose anyway if you dont make payments, but whatever it cost you to get into the deal will also be lost. Not to mention you have taken over all the equity in the property and then the previous owner now also officially forecloses .