Posted by Bill Gatten on December 07, 1998 at 20:07:11:
Would suggest placing the property into a land trust in your name, and letting the seller keep a percentage of beneficiary interest in the trust, representing his “share” at the end of the agreement.
The Beneficiary Agreement would stipulate the percentage of net profit to be shared between (among) beneficiaries.
The way I do it is this:
- Agree that after (upon) closing, you will place the property in a land trust in your name and assign a portion of the beneficiary in it to him (your seller).
- Execute an Assignment of beneficiary interest for the 40% (or whatever percentage you settle upon… 40% sounds reasonable) to the seller
- Create a Beneficiary Agreement stipulating that at the end of the agreement, he gets his 10K and 40% of the net profit on sale and you get the rest(i.e., refers to the net profit after loan pay-off; after a return of your intial contribution [closing costs and down payment], and aftr any costs of disposition.
The Bene. Agreement stipulates that upon the termination of the trust (in 3,4, 5 years), 1) the loan will be paid off; 2) the costs of sale will be paid; 3) you get back the money your started with; 4) he gets back the $10K, and 5) the rest is shared between you, with respect to each party?s percentages of beneficiary interest held.
E-mail me personally on the issue if you like.