trusts vs. sub2

Comments(9)

• 
  HoGiHung17th February, 2003

  Drifter,
  
  I have come to the same conclusion and asked the question a little ways back. Hopefully you get some good responses, especially from the pro's of Sub-To and Trusts.
  
  You will need to incur, or have the current owner incur, the cost to setup the Trust. The way I have planned on doing a deal, assuming I find one, would be to first have the seller put the property in the Land Trust. Once that is completed, then give him/her their equity and have myself added as the beneficiary and them removed. I believe this is the way it is to be done.
  
  Ho..

• 
  jfmlv195017th February, 2003

  Hi guys,
  
  Sub 2 is a method of purchasing property, while a trust is a method of holding title.
  
  The other similarity is that both Subject To and Trusts have ssss, ttttts, and uuuus in their name.
  
  Best of luck
  
  John (LV)

• 
  drifter17th February, 2003

  John,
  
  I think the bigger common thing is they both leave the existing loan in place

• 
  HoGiHung17th February, 2003

  True and true. You can also have a seller put his property into a Land Trust (or one like Derrick suggests) then transfer the beneficial interest to you. So I think that is why drifter and I see the comparison.
  
  Thanks for the posts though. It really helps us out.
  
  Ho...

• 
  mel17th February, 2003

  Thanks JohnLV for clearing that up!
  Toooo funny
  Mel

• 
  bginvestor18th February, 2003

  Ho,
  
  So you want the seller to put the property in a land trust first, than offer the deal?
  
  I see issues..
  
  How will you assure the seller that you won't walk away from the deal shortly after the seller puts it in a trust?
  
  Bginvestor

• 
  drifter18th February, 2003

  You may need Derrick for this question - it is something about a trust and you the beificiary so you have the voting power or something like that...
  
  DERRICK!!!!

• 
  DerrickAli18th February, 2003

  Thanks Drift!
  
  A Trust is not WHAT we do nor is it something you SELL...
  
  The Trust allows you to do WHAT the Seller/Owner wants you to...
  
  Buy their home!
  
  It protects the title and interest of everyone involved in the deal.
  
  If the seller has a change of heart upon placing the home into a Trust that's their problem.
  
  What I do to secure my interest is to have them to Assign Beneficial Interest(ABI) to me in an appendix to the Beneficary Agreement naming me as their remainder agent co-beneficiary within the Trust plus I get a power of Atty.
  
  Both the Appendix and POA acknowledg my agreement to:
  
  - Pay off 100% of all the property's debt,
  
  - The MAV (Mutually Agreed Value) or equity to be paid to the seller and
  
  - Any/all maintenance or/repairs to the property.
  
  If the owner decides to back out it's his problem and I'm not out of one penny.
  
  He's placed his home into his own Land Trust for asset-protection or estate planning purposes.
  So I'm not at a loss if he decides to back out...it's his mortgage payment still NOT MINE!
  
  Sometimes I offer to pay for the Trust set up on their behalf but I make sure I get the ABI, POA and Option NOTARIZED
  
  Then I search for an R/B (Residential Beneficiary) to come in with the upfront cash to MOVE IN and pay 100% of all expenses... ei. Land Trust set up and
  MY POSITIVE CASH FLOW!!!
  
  I hope this Helps!
  
  Derrick Ali
  [addsig]

• 
  Tanner19th February, 2003

  Derrick,
  
  What is the cash flow agian?
  
  The mortgage pymt diff>
  And the interst diff from seller loan and your loan to buyer?
  
  Interest and equity that's building?
  Do you split equity over MAV with new onwer or seller? <IMG SRC="images/forum/smilies/icon_biggrin.gif"> [ Edited by Tanner on Date 02/19/2003 ]