Land Trust Back Door
Hello,
Great Web Site!!!
I am an investor getting into short sale. Can you please help me with the below questions.
Question1: When is the right time to have the property placed into a Land Trust?
Question2: In the event I do not come to an agreement with the bank, is there a back door to get out of the Land Trust.
AC
[ Edited by shakenbake on Date 06/05/2007 ]
why do you want to use a trust in a short sale?
The classic reason is to try and avoid the DOS clause.
I was told that you place the property in a land trust to have cotontrol over the deal. And also from reading many post i see people place them in land trust.
I am not the owner of the property.
also people place short sale candidate into a land trust to avoid other lien attaching the house before the short is negotiated.
I had a deal fall apart because the bank had a good time dragging their feet. It took them 8 months to come to an agreement, and those 8 months a second lien holder placed a lien on the property a month before we got the deal negotiated.
Had i placed the property in a trust like i know i should have. I would be sitting on 15 big ones now. Had a buyer lined up to purchase and everything.
To answer your question, as soon as the title search has been completed is a good time to place the deed into a land trust.
Good Luck
How does having it in a trust, prevent a lien from being filed?
If the property is being placed into a land trust, a lien being placed against the property against the previous owner can no longer be filed since there is a new owner of the property, the trust.
-when doing shortsales, if you want to do them as "no money down deals" you absolutely should use a land trust. Once you have made sure the title is clear, by searching it yourself, or if you are not confident in doing that, then having a title search done, you should place the property in a land trust. This way you have the right to list the property for sale while your shortsale is pending. The goal is to find a buyer so that when you get your shortsale gets accepted you can do a double closing and make your profit without risking any money.
Thanks for all the info.
One more thing:
In the event I do not come to an agreement with the bank, is there a back door to get out of the Land Trust?
i take it youre coming in as a buyer?
you would need to tell the seller to deed legal and equitable title to a 3rd party trustee - preferrably licensed and bonded. this trustee is now the true owner of real property.
you will be known as a co beneficiary of the sellers trust that holds real property.
property should be protected from lien attachments since the seller is no longer a true owner of real property. also hold your beneficial interest in an LLC for added asset protection
[ Edited by d3fcon80 on Date 07/12/2007 ]
Also landtrust solve the seasoning issue because equitable title is being passed from the seller into his personal trust its the same thing. The only difference is that the seller can assign his interest to someone without changing title. So in a nut shell seller can assign his beneficial interest to an investor who will then get the check from the proceeds that would have went to the trust.