The Trustee is legal and equitable owner of the property (real estate) and title is held in his name (which is why I use the same non-profit corporation each time).
We triple net lease single family homes all the time. You can do a straight lease but why would you want to?
Payments are made to the Trustee as I described. The Trustee pays the mortgage and sends you your cash flow check in the mail each month.
Title is in the Trustee’s name so if someone searches public records your name will not appear. You don’t own the non-profit corp, you are a certified member. The Trustee MUST act as directed by the beneficiary (you).
If you are sued and have an unrelated party in your property as the tenant, the trust cannot be partitioned because it is personal property, shielding you from actions associated with any party’s past bankruptcy; creditor claims and civil judgments; litigation in marital dissolution; probate actions, and even state and federal income tax liens.
But back to my origional ? How would I get a new mtg. I walk into a bank and say hi my name is Dave will you give me a loan and they pull my credit and see Dave owns nothing but owes everything.Would I obtain new financing for the Trustee?
Assuming your new mortgage will be on another house, you do not list this property under “real estate owned”, but under “stocks and bonds” since you do not own the property (your trustee does), but you do own the trust that owns the property. (see my answer at 7:34 AM)
The Trustee writes a letter to the lender confirming that your property is leased on a NNN basis. The lender does not count this against your debt-to-income ratio because you are not liable for maintenance and repairs and vacancies are not expected.
If you want to refi the mortgage on the current property, you should do so, then place the property in trust and take title in the name of your LLC.
I would offer my tenant the opportunity to convert it to a nnn and share in the benefits of homeownership. If your tenant is a good one, he may well be interested in the property tax and mortgage interest writeoff (and/or a share in future appreciation) in exchange for the maint. and repair responsibility.
If your tenant does not agree, you are correct in that a trustee letter cannot work without a NNN lease.
This all seems very logical and I appreciate all the advice. I need to do some more homework to better understand how this all works. If anyone has anymore to add to my situation, just read the first post in this forum and reply. Thanks again