Posted by Richard Roop on June 16, 2001 at 09:09:11:
Excellant advice Brian!
- Richard
TWo “Subject to” questions - Posted by Earnest
Posted by Earnest on June 16, 2001 at 06:50:26:
Two questions on a subject to offer I may want to make. The selling couple is eager to sell and moving out of state; the husband was transferred by his employer and already gone.
I don’t wnat to do a trust yet; I haven’t studied trusts enough yet and I want to hold the property myself, rent it and sell, say ,in 18 months. If pressed, I would agree to pay off the loan in no less than 30 months. Is there anything I should be wary of since I will have to coordinate loan paynents with people moving 1000 miiles away.
Responses from knowledgeable people is appreciated. THanks ahead.
friendly advice from an attorney - Posted by SteveS(CPA)
Posted by SteveS(CPA) on June 16, 2001 at 16:34:10:
Earnest,
First off, everything Brian said is 100% right and true. I just want to add that by taking the property in your own name makes you an attorneys next trip to the Bahamas when you get sued.
Believe me, we love your kind. If I were trying to collect a debt from you I would attach liens on your properties faster than a you can say, judgement. I would have you and your property tied up in litigation for months, if not years, and force you into a settlement that would leave you broker, but wiser.
Believe me when I say, the only people who say, “it will never happen to me,” are only the people who it hasn’t happen to yet. The rest know better.
Just some friendly advice to keep you safe, healthy, wealthy and happy.
Re: TWo “Subject to” questions - Posted by B.L.Renfrow
Posted by B.L.Renfrow on June 16, 2001 at 07:57:51:
I would strongly suggest you NOT forgo the protection of the trust, particularly if this property has a loan against it already.
Though it may sound intimidating at first glance, the trust is NOT difficult to understand and put together, once you’ve done it. Heck, if I can figure it out, anybody can.
Subject-to deals are not risk-free. But if you eliminate the protection of the trust, what are you going to do when:
– The lender calls the loan due because of title transfer?
– You get a judgment or lien filed against you, from something totally unrelated to this property. Now, you can’t sell or transfer it without paying off the lien.
– A tenant suffers an injury on the property and sues the owner – YOU.
– Some unforseen financial catastrophy strikes, and you have to file personal bankruptcy?
ALL these situations are very real potential complications, not some theoretical mumbo-jumbo. And they can ALL be mitigated against by proper use of the land trust. Spend the few hundred dollars for Bill Bronchick’s land trust course and read it. Read it again. You’ll then know far more about land trusts than 99% of the lawyers, brokers and others in the business. It includes the proper forms to set up the trust yourself. If you’re still not comfortable with it, pay another investor to walk you through the process the first time around. After the first time, it’s just a matter of changing the names, addresses and so forth on the documents.
Finally…if you are taking title to the property, in a trust or otherwise, you are making the loan payments, not coordinating them with the sellers 1000 miles away. They should be out of the picture. Also, I would NOT promise them you’ll have the loan paid off in a certain time period. Things happen…I’ve made that mistake myself, and I won’t make it again. Tell them you’ll pay it off when someone buys from you, but you can’t predict when that will occur. Make sure you get a limited power of attorney from the sellers so you can cash insurance checks, escrow refunds and the like. You don’t want to have to be sending stuff across the country for their signatures and hoping they’ll send it back.
Brian (NY)
Re: TWo - Posted by randy @getthedeed
Posted by randy @getthedeed on June 16, 2001 at 07:02:17:
do not make a promise that you can not keep. tell them that you will do all you can to get buyer cashed out as soon as you can. tou should find someone to help you with a trust
randy @getthedeed