LAND TRUST AND DOUBLE CLOSING
Hi. My name is Courtney Worthington. I have a question.
I would like information and advice on how to do a double closing in a land trust. I am looking to buy from a Seller and then sell to a buyer in the same day, but I am running into seasoning issues. Can someone please tell me how to structure this deal so that the buyer can get financing to purchase from me? I heard a land trust is a viable avenue.
Sincerely,
Courtney Worthington
Real Estate Investor
[ Edited by Courtney_Worthington on Date 03/15/2011 ]
Let us know if you find anyone that will do what you want - seems extremely unlikely these days.
If you meant to change the beneficiary of the land trust the same day you may be able to do that. Or just sell the contract to the end buyer. Or just deed to an LLC (or Corp or LP) and sell the entity to the end buyer. The end buyer has to be sophisticated enough to understand it (and/or his attorney has to be). If the end buyer is a regular retail buyer who is obtaining a mortgage it will likely not work.
In my humble opinion, try to keep from forming a partnership. You need one person in charge, so either be on contract to do the rehab or you are in charge with a money backer. As for sharing profit. Decide on a split for the profit based on contribution. Maybe 10% return for money, hourly or project fee for work, and split the proceeds after those items 50/50. Most partnership have a hard worker and a talker. So the work is usually not evenly shared and one or both will not feel a fair shake in the end. So, bottom line, think it out carefully, write it up in an agreement, and have an exit strategy no matter what you decide.
The cheapest way to "partner" is to borrow the money. Rate and LTV to be negotiated. Do not go higher than 75%. Pay back quickly to keep the relationships going. Splitting equity is harder to justify since this partner does not want to do any of the work and in any event is your most expensive way to finance.