Noticed your post and IMHO, I would have used a land trust since I just do not believe in taking title then you become obligated for all these costs.
Then you don’t believe in Subject To transactions?
The reason also is if the deal goes south due to the seller having financial problems you can walk away and dissolve the trust since I use non-exclusive options so you do not hinder the seller in any way and do not get hit with practicing RE w/o a license…
In a traditional Subject To transaction, where the seller transfers title to us, any problems the seller experiences thereafter will have zero, negative impact on us as title holders. The seller could file bankruptcy, have judgments awarded against him, get divorced with a fight over assets, and this has no impact on our deal after the transfer. So, I’m somewhat confused by what you’ve posted here.
With all due respect to Mr Jay you do sound like you are very good at subject 2 transactions.
Yes, I am very good at Subject To, thank you. :smile
Just be careful in how you structure it.
If you do a Land Trust I would have had him directly vest title to his designated trustee since you doing there could be a chain of title issues.
There are no chain of title issues in a normal Subject To transaction. Title is transferred, period.
AS to the exit strategy if you do a land trust which I would suggest no legal advice intended make sure your escrow or attorney in how it closes is land trust friendly and understands the trustee would be selling the property to your end buyer.
[b]You’re describing a glorified Sandwich Lease/Option. This would be a terrible Subject To transaction model to follow. If the buyer defaults, who’s going to handle the foreclosure? The seller? If so, why would a seller involve us in the deal in the first place? If we’re not taking taking title; have no beneficial interest in the deal and the deal “goes south,” what’s to stop the unsuspecting seller from getting screwed six ways from Sunday ---- because we’re no longer involved in the deal? We’re the experts! We know how to solve these problems…
Meanwhile, we can’t make the big bucks on Subject To deals simply putting parties together. As a Subject To investor, I want the ability to resell that same house a couple of times in the course of ownership for about $30,000 down each time. I can’t do that with your model…without a lot of additional negotiations and finagling.
And can you imagine trying to get a seller to agree to “round two” of potential defaults, especially after having to cough up a couple of mortgage payments to keep things current? I don’t want the original seller anywhere near me, when I’m negotiating the evacuation of a defaulted buyer, or reselling, or capturing more down payments for myself. And I have professional ways to cover the mortgage in the event my buyers stops paying. I also have effective ways to getting defaulted buyer out of my house without losing any money on the deal. What seller would know how to do these things?
Meantime, because BradenMan’s house has no equity in it today, the main profit point is multiple sales of the same house over a period of time. Try explaining that to a seller who’s got zero experience with either seller financing, or handling defaults, much less reselling a house a couple of time…?
Therefore, I think this boat will sink BECAUSE we’re not part of the deal, not because we ARE part of the deal. I could be missing something here? :rolleyes [/b]
some do not and can red flag it and may have issues with the title company insuring the title.
This doesn’t happen in a traditional Subject To transaction. It might if we start trying to get creative with our documentation…
You absolutely can use and LLC and should have one for the liability protection it affords. You can always assign your % of beneficial interest to your LLC when you get that entity created so no worries there.
You have no beneficial interest to assign, the way you described the situation. What am I missing here? :smile
If I can help on the LT side let me know
Good luck on this deal…