Posted by Terry (Houston) on September 14, 2001 at 07:43:07:
If she absolutley does not want to assign beneficial interest over to you but will sell to you as subject to, do a Land Contract with a wrap clause.
The wrap clause would state that the terms of the LC “mirror” thoses on the underlying loan.
Put the house in a trust, and have her give a warranty deed to be held in escrow.
Record the contract as the buyer to protect yourself.
That would be the next best step if the true subject to will not work.
I am sure that thos who are more in tune to a Pac Trust will offer their thoughts as to how that program can help. I don’t know enough about it.
If she has a lack of understanding then you might keep trying. Ask her “what is about assigning the benficial interest that conserns you?”
Seller wants to remain beneficiary of trust. - Posted by Connie (CA)
Posted by Connie (CA) on September 14, 2001 at 07:25:13:
My seller is willing to deed their property to a trust, with me or my LLC as trustee, ‘subject to’ the existing loan.
She is an attorney and states she is afraid to assign her beneficial interests. I do believe it is a true lack of understanding the process and not a case of wanting to deceive me down the road.
Is there anyway I can protect my interest or should I just walk away? It is a lovely 3bed 2bath and she is willing to sell under market.
Thank you for your help.
Connie
Re: Seller wants to remain beneficiary of trust. - Posted by wayne
Posted by wayne on September 15, 2001 at 02:45:22:
The advice you are giving is nice, but a pactrust is expensive. Overall it is not expensive and if you know how to do a subject too yourself…then it is wasted money.
Most states have pretty restrictive laws on contract for deeds…if you record a contract for deed…does this violate the dos? You bet it does…so what are your options…if the seller wants to remain a beneficiary then fine…keep her at 10 percent…or have her sign over the beneficiary intesrest and file it into escrow. Either way as long as the trust has all of the appearances of being revocable then the dos is not violated.
You will need that beneficial intersest assigned or your buyer cannot reap the benefit of the tax writeoff.
Or you could pursue a lease option…
Me personally…I do all types of purchases except contract for deed’s …
Posted by Bud Branstetter on September 14, 2001 at 09:41:26:
Connie,
She does not know you. While I will believe you are honest the seller does not know if you can perform. Does “the process” include a third party collection service? How about a neutral third party trustee? Is there a way for the seller to recover the property with their name on the loan if you can not perform?
As Terry says the PACTrust does provide these features and more. Call Bill Gatten and talk to him or have him talk to the attorney. Bill doesn’t do it for free but you can do it yourself if you understand the subject to process using a land trust.