Dealing with Non-owners - Posted by Mark Vidales

Posted by Bill Gatten on December 07, 1998 at 20:34:32:


Land Trust (i.e. “PACTrust”)!! Here’s what I do when this happens (“dufus” eh? Appropriate phraseology here). I play Mom?s game and say the following:

Me: “No problem Maaam. What I’m willing to do is NOT take any title interest in the property at all until I can take your daughter completely off the loan. We’ll set up a trust for her, in her own name and let her hold the property in own trust making me a co-beneficiary, so as not to violate the lender’s due-on-sale clause; and so that she doesn’t have to take any chances with me. In the meantime, I’ll pay for 100% of all payments, maintenance, repairs, upkeep, property tax, insurance, Home Owner?s Dues, PMI insurance; and baby sit her children and feed the dogs. Then in about six months to a year, I’ll put a new loan on it or refinance it and take her complete off the loan at that time.”

Obviously in doing it this way, you have 6 months to a year (or more? whatever you agree on) to market the property, sell it and pay off the old loan. The Mom and daughter are secure that there is no chance that your potential problems (personal or financial) could ever embroil the house, or that the dreaded Due-on-Sale clause could be violated.

I might even sweeten it a bit more (costs you nothing, but sound most magnanimous) … tell Mom that you?ll only take a 10% interest in the trust and that her daughter can wait to forfeit the other 90% to you at the end of the trust, when you put the new loan in place. Despite your percentage of beneficiary interest, this gives you 100% percent of ALL the benefits of ownership, including all tax deductions, principal reduction, appreciation, use, possession, water rights, etc., and makes the seller VERY comfortable. And? since a 3rd party unrelated trustee holds the title, she cannot change her mind, alter or thwart the Beneficiary Agreement in any way.

Good luck.


Dealing with Non-owners - Posted by Mark Vidales

Posted by Mark Vidales on December 07, 1998 at 11:32:18:

o.k. I called on an ad that was about 1 month old, a MUST SELL ad, seems the mother is selling for the daughter because daughter got transferred and house is vacant. They have someone going F.H.A. that is supposed to be closing soon. O.k. I say if something falls through give me a call.

She calls me back the next day saying doesn’t look good, the buyers are having problems. I start asking the regular questions and of course she tells me the loan is not assumable and ya gotta get a new loan. “Ihate when they say that!!” so I’m trying to get some feel for what the situation is. It seems they aren’t having much luck. Anyway
I can’t seem to get a feel for what the seller (her daughter will go for) I threw the rent- to -own concept her way and she wasn’t sure they wanted to do that, maybe they would just rent it, DUH!.. so here’s my dilemma what do you people out there do when you run into this situation where you have some dufus trying to sell for their relatives?

How can I get hold of the daughter? she recently moved so there may be no way of getting a forwarding address since the mother picks up the mail, hmmm any suggestions on how to pursue this?

I’d like to buy it and re-sell on a land contract wrap around. House owes $85,000.00 can probably get it for at least $90,000.00 it’s worth $112-118 with low down seller financing, that’s the plan anyway…