I have an idea that it sort of a modified version of a seller finance deal, but really it’s different than that. It’s more about title leasing, or temporary title purchasing.
The idea is that a prospective investor goes into contract with the seller for a temporary title transfer for an agreed upon down payment (like $1), and a note is written on the investor, that he has a certain amount of time to come up with the full purchase price (like, a year), or he has to relinquish the title back.
For every 30 days in which the investor has the title, and the right to sell the property, he pays the original seller an agreed upon amount per month (like $500 or $1000) which goes toward the purchase of the title. If after the one year the investor has not been able to locate a buyer and obtain the full agreed upon purchase price, then he must release the title back to the originator of the title, and the note is also expunged at that time.
The advantage to the investor is that he is legally able to sell a property that he has only paid a negligible amount for, and the chance to receive a nice profit from a property he would otherwise not have been able to sell.
The advantage to the title originator (original seller) is that, not having title, he owes no taxes during the one year time frame, does not have to move out (until the property is sold and closed upon), is not responsible for repairs (since the investor has title, and is therefore the landlord of the property), doesn’t have to worry about selling the house, and pays no commission to a realtor or agent, and he also gets paid monthly to live there.
So is this legal to do?
What do think of it?