Hello Tim … or anyone else that can fill this void. For those of us that are lucky enough to get 9,10% or more down on houses that we acquired sub 2 POST the Contract for deed changes in Tx laws there really are no “booklets” or special reports on the best way to do this. Of course I understand the L/O disposition when T/B pays 3-5% but my problem is when they have substancially more cash down. I have found a few Texas specific posts where people are using deed (unrecorded), DOT (recorded), pro investor escrow agreement where docs are held by investor, etc. Probably for ease of f/c. I’ve read where some inv. bribe buyer to leave in lieu of f/c. Here is my suggestion. Get a good Austin R E Atty & YOU author the report A-Z & I’ll be your first student/BUYER.
Gene Texas
ps: one re atty said handeling a 10%+ dp owner fin sale like described above could result in a re-characterization as a C-F-D sale along with it’s entanglements. This seems like a can of worms but needs to be resolved.
Thanks!!!
Gene,
Of course, everything is subject to change (no pun intended), but I’ve been advised by an attorney to just sell on a wrap. So, I would transfer title (recorded) and complete a new deed of trust (also recorded) . I still maintain control of everything else, but it’s their house.
I used to just sell the beneficial interest in the trust using a bill of sale and a recorded deed, but was advised it was too messy for foreclosure proceedings, if needed. And I wasn’t recording a security instrument in my favor in that scenario. :hammer
I think the proposed scenario would remove the recharacterization issue as the buyer actually has title. The downside is matching the loss payee on the insurance policy to the borrower on the loan.
I haven’t had one come up to really think it through since receiving this advice. Although it may be tomorrow as I had a call tonight where it would be applicable. So far, I’m leaning toward the buyer getting their own insurance naming them as the loss payee and me as the mortgagor and leaving my policy in place, but I’m sure I’ll shoot holes in that idea before long.
If I have any brainstorms, I’ll let you know.
Thanks for the reply! I wish we could get one best way to handle this down. One ins agent has mentioned new owner as a lender on policy.
Been there done that…
When Sept. 9th rolled around and the laws changed for all of Texas…
Previously, it was already a law that had been on hte books for awhile… (Eric C pointed that out to me, Years back)
I had been Still selling on CFD… I was being the dinosaur… I decided I still wanted to Run owner financing ads… and continue as I had always done… figuring most judges wouldnt no the laws anyway… I’m still convinced most don’t…
I decided against remaining a dinaosaur… As well as… Lots of folks were now selling on L/O with very little down… market was getting flooded with houses here in Texas… Builders still giving away, down payments, closing costs and marketing… No Money Down…
I then became a L/O convert out of necessity… I wasnt letting some in a house on a contract for deed with a low down… the potential for a suit was too big…
So, then it remains… What to do…
To me the options were simple…
Something confusing like a contract for Beneficial interest…
A seperate Beneficial agreement… Ala Pac Trust…
Or sell on a wrap…
So, Now I sell either by way of L/O or on a wrap… Dot and all… Above 10% a wrap… below a L/O…
Pretty simple, straight forward… and I go about my business…
David Alexander
Just curious if you don’t mind. How do you handle: ins for the new buyer, escrow agreements-if any, deed recordation, DOT, and … what’s your game plan if you have to foreclose? $750.00 minimum to the atty plus vacancy costs? I guess it’s worth it if you are getting 10% down. May I ask what city in Texas you are in? I see your name a lot & have visited your web site, but it is down for repair.
Thanks
Gene Texas
as in Magnolia, Texas population 1100 YEHAWWWWW!!!
I’ll have to ask my partner about…
I’m not sure of the exact structure…
But, I will find out and post… the wrap thing is new for us as well…
Just a decision we made…
Foreclosure:
Paying a attorney should cost you more than about $450 max…
My opinion… and I don’t advocate folks to do many things themselves… If it can be hired, just pay it…
But, You really need to handle one foreclosure yourself… At least if they are all as easy as Texas…
It’s a very simple process… filing some docs… and going to the courthouse on the first Tuesday…
I’m in Dallas…
And BanditSigns.Com is back up… Yippee…
Don’t even get me started there… Just say… for those of you starting a serious web site to garner business… pay attention to your Host… they ain’t all the same…
David Alexander