Trust Question
My family member has a Townhouse which he would like to walk away from, or co-own with minimal responsibility for maintenance and management. He is not behind, but has several late payments and a low FICA which is hindering his ability to re-fi and stay in the property.
I would like to take this off his hands with as little money as possible and use as my first rental. Mort. is non-assumable. The current int. rate is somewhat high and I would like to re-finance to improve potential cashflow.
If my understanding of a land trust is correct then we could put the property into a trust with both parties as beneficiaries, whereby we would share the ownership. I will maintain and manage the property.
I am trying to do this with little to no money for conveyance costs. Is there an easier way to accomplish this?
If my assumptions about the trust are correct, how easy will it be for me to re-finance using my FICO and credit history?
You're right, in that a trust, set up and used to take the deed to the property, if done as per Garn St. Germaine Fed Law, would NOT trigger the DOS clause.
There's probably a LOT onsite, here, re GStG trusts & how to use them, so you should read and study.
Be aware though, that even a basic trust is NOT something a layman should tackle without a lawyer, and you'd be advised to have your lawyer do your trust & the necessary conveyance docs of the RE into the trust...so it's all done right. I'd guess that most anywhere in the country, that should cost you no more that $2500, so shop around until you find the best fee deal.
If you don't find a lot of info, here, if you'll email me directly, I'll give you another site or two that I know DOES have lots thereon re GStG trusts.