Better To Take Title Through A Land Trust If Flipping To A Rehabber? Seasoning Issue Resolved?
If I can't do a double close, would it be better to take title in a land trust first? Then find a rehabber to purchase the property, to avoid him having seasoning issues?
I have seen this method become more and more popular with investors in the last year. You are correct as long as the original owner's name is on the title in some way there would be no complete change of ownership. Even if the original owner does not have an equity interest in the property. I know several people who use this method. And the chain title has a steady flow of the original owners name which is the only issue for seasoning.
Lori
[addsig]
So I think your question is whether, having taken title in the name of the land trust, you can assign the trust to someone else? And does this, because it keeps the title from changing hands effectively back-date the transfer of title to the rehabber when he sells.
Unfortuantely, in Illinois, probably not. Lots of people were using land trusts to avoid paying transfer taxes when they sold property by simply transfering the beneficial interest of the land trust. So they changed the rules, a change in beneficial interest is still a transfer of title and stamps have to be paid. My guess is that if the lender orders a title search your transfer is going to show up.
Then what are my options? I guess the rehabber will have to arrange his end buyer to use a lender that doesn't care. I'm guessing that with an experienced rehabber this won't be much of an issue. Thanks.