Flipping REO's via Land Trust

I am interested in doing the Land Trust to resale REO Properties, can anyone tell me the process on how to do it, and provide me sample documents on how to do it, I am a seasoned investor, and I am very interested in this process.

Edited: 06/26/2010 at 11:25AM

Jeff B.

Real Estate Investor · Lake Worth, Florida

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Jan 29 '10, 04:47 AM

This site has a lot of archived useful information if you just use the search feature. The specifics of Land Trusts are state specific but the basics of how they work are described in many of the posts I found when searching for Land Trust.

Edited: 06/26/2010 at 11:25AM

Will Barnard

Rehabber · Santa Clarita, California

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Jan 29 '10, 04:54 AM

Welcome to BP Nation Shakeeta.
You question seems to stem from the many gurus who preach about some program they sell which rarely works in the real word today.

Land trusts are a huge red flag to banks and thus are not very effective to your success.

Take the advice above and read some of the many forum topics on this subject.
There are many ways to flip contracts with REO's other than a land trust.
1. Form entity and sell entity to all cash buyer
2. Place offer in a trust (not land trust) and then sell the beneficial interest in that trust
3. Add buyer to purchase contract and quit claim deed after closinjg (or at closing)
4. Substitute buyer (often harder to get approvals for.
5. Use transactional funding where the entire purchase amount is funded, your deal with teh bank closes, then your end buyer closes on the back end contract the next day and pays off your lender and your profit margin.
6. The list goes on.

Edited: 06/26/2010 at 11:25AM

Will Barnard, Barnard Enterprises, Inc.
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Ray Keziah

Real Estate Investor · Ewa Beach, Hawaii

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Jan 29 '10, 05:24 AM

Yes listen to Will and Jeff.

Also I've bought a system (NARS) from a guru that deals directly with land trusts. It was a waste of my money because once I took the system home I had very few contacts to actually guide me on how to use it.

It basically clouds the deed/title by putting the it into a trust along with you, the seller, and buyer as beneficiaries so the banks will not know who the actual property owner is. It just gets more complex with all the hiding also more expensive with all the fees and services. Just not worth the hassle.

But if you insist, go to landtrust.net and look at their forums to get some ideas on how it works. -Ray

Edited: 06/26/2010 at 11:25AM

Ray Keziah

Real Estate Investor · Ewa Beach, Hawaii

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Jan 29 '10, 05:53 AM

oh sorry Shakeeta, I totally misread your question. If you purchased an REO property from the bank it is yours free and clear..I"m not sure if there are any liens that could exists after an REO is sold.

Anyways yes you can put the property into a landtrust and sell but, why would you do this if you already bought the REO from the bank?

Why not just sell it, or lease it out, or option, or whatever you want really?

I believe the main purpose for a landtrust is to hide the title/deed owner from the bank you owe the mortgage to or anyone that wants to know for that matter.

Edited: 06/26/2010 at 11:25AM by Ray Keziah

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Jan 29 '10, 06:06 AM

The notion of searching is more tedious than some might want to endure... But I found the below thread that is dead-on for the topic at hand - and I found it in the "Related Discussions" on this page!

http://www.biggerpockets.com/forums/16/topics/37088-flipping-reo-s-via-land-trust-

Edited: 06/26/2010 at 11:25AM

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Jan 29 '10, 06:17 AM

Originally posted by Ray Keziah

... I"m not sure if there are any liens that could exists after an REO is sold.

...

Liens can exist before a property is sold, and can survive the sale of the property - and that can be for any property, not just REO. This is very easy to comprehend if you consider the notion of "subject to" investing, where the mortgage stays in place upon transfer of the title/ownership.

In a typical REO sale, a title search will be performed, and the bank will have to clear all existing encumberances before the buyer accepts it. But if there is a quit-claim deed used in transferring the title, then all liens might remain in place.

Edited: 06/26/2010 at 11:25AM by Steve Babiak