I am looking to put a unrelated persons home (which is in the forclosure process but has about 3 month tell auction) into a land trust naming me the beneficiary. What is the best way to set this up. Should I use a lawyer or is it easy enough for a real estate novice to pull off? I it is relatively easy for a person to do out of thier home office does anyone know where to get the forms?
Stay away from lawyers. You can set it up yourself online.
Da Wiz
Stay away from lawyers, Thats what Ive heard. What is the reason? Also have you ever seen a Lender call due the loan after transfering property in to a trust?
I’ve seen them try. From my own recent experience, I placed my former residence in trust, leased it to a tenant/RB, and converted my homeowners insurance to landlord insurance. Countrywide was the lender and the insurance was through their satellite company, Newport. I called my loan officer and told him I had deeded the property to my trustee and leased it out. He brought up the DOSC and I told him that, besides having never missed or been late with a payment, there was an exemption for land trusts and I quoted him the section of the US Code. He said he would discuss it with his legal dept. and get back to me. He never did.
Several days later I called him and he admitted that my interpretation was correct and that the land trust was, in fact, exempt. Bill Gatten has a letter from them and one from WAMU indicating the same finding.
Da Wiz
Which US code number is it? I would like to keep that on file. What kind of homeowner insurance coverage does “landlord” give verses homeowner? Or is it just to keep your ownership underwraps? If I were to look for Land Trust Docs were would I look. Do you know do any PDF form on the net. I have a good friend that has all the needed for but I can’t get to give em up. Thank for the link. Also what is an illinios land trust?
thanks for the info
Here’s the link for the US Code: http://www4.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00001701---j003-.html
We don’t keep ownership under wraps. We are telling the insurer that the property has been placed in a land trust and leased as is permitted under the code above. We require the tenant to get renter’s insurance as they are leasing.
An Illinois title-holding revocable inter-vivos living trust we call a land trust. I use a land trust as the engine for the system I use, combining it with a triple net lease and equity share.
Da Wiz
A homeowner’s policy is intended for the owner-occupant. It provides hazard insurance for the structure and contents coverage for your personal property kept in the house. A landlord’s policy, also called a rental dwelling policy, provides hazard insurance for the structure but minimal coverage for personal property that you make available for your tenant’s use (washer/dryer, or refrigerator, for example). Your renter’s personal property is not covered against loss by your landlord policy. That is why renter’s should get their own renter’s policy for their personal property.
Insurance companies are picky about having the right type of coverage, too. If you have a homeowner’s policy for your rental property, the insurance company may deny any claims since you are not using the property for the purpose the policy was issued.
Thank you for the explanation. Another question. If I want to put a property into a land a single family dwelling that is owned by a different person but I want to make me the beneficiary of that trust. Do I treat this the same way as a property that I owned?
if you don’t own it, you can’t put it into a trust; the owner must do that. the owner can make whoever they want the beneficiary.
as beneficiary, you treat it as if you own it; you own a “beneficial interest” in the property. You take all income, deductions, etc for the property as yours.
winsblow,
No one asked what you hope to accomplish by having the homeowner deed his property to a trust and name you as beneficiary. Are you planning to leave the defaulted loan in place and make up the arrearages?
Tell us a little more about your plan for this property.
Yes I am planning on making up backpayments and penalties to stop the forclosure process. I intend on leasing back the property to the loan holders. Then after a short lease liquidate the property.
I’ve got to ask. Are you planning to rent back with a negative cash flow? If the homeowner can’t make his mortgage payment, how will he be able to make a rent payment if your rent has to cover your expenses?
yes I am for three month. There is enough equity to make it profitable even if they don’t pay anything. They are relocating to another state due to career change. I am just giving them a little time so they don’t get kicked out, get a forclosure on there credit.
bump