How to Close REO Wholesale Deals (Part 5 of 5): Using a Land Trust

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Today I am bringing you the final post in my five part series where I have explained the various methods available to wholesale REO deals and get around the “No Assignment” clause that most banks include in their addenda.

So far, I’ve discussed simultaneous closings (my preferred method), double closings, using a quitclaim deed, and using an LLC.

Using a Land Trust to Wholesale

In this post I will be talking about using a Land Trust to get your REO wholesale deals to the closing table.  This strategy is similar to the LLC method that I discussed in last week’s post; in both instances, you will not be selling the actual property to your end buyer, but rather, the LLC or the Land Trust which owns the contract to purchase the property.

If you decide to wholesale your deals in this manner, you will be making your offer to the bank in the name of a Land Trust (which you will create once your offer has been accepted), and signing the offer as the Trustee of the Land Trust.

Once you have located an end buyer for your deal, you will be assigning your beneficial interest in the Land Trust to them in exchange for your agreed upon wholesale fee.  Your end buyer will then bring the funds for the purchase of the property to closing, along with your fee.

Once the closing has taken place, your buyer (who is now the beneficiary of the Land Trust which owns the property), will fire you as the Trustee and appoint another.

Just like the LLC method that I described last week- when using a Land Trust to wholesale your REO deals, there is only one transaction taking place, so you will only have one set of closing costs to deal with.

The paperwork required to close deals in this manner is going to vary depending upon which state you are in, so you will want to consult with a local real estate attorney and have them prepare the necessary documents for you to ensure that you are properly protected in the transaction.

Whether you decide to close your REO wholesale deals using a Land Trust or one of the other strategies I’ve discussed over the course of the last five weeks, I recommend that you make this decision before you start offering on properties. Doing so will make your life much easier once you start getting deals under contract.

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About Author

Formerly a bartender, Steph Davis is now a full time wholesaler in Tampa, FL. If you'd like to get an idea of what it's really like out there in the trenches, head on over to her blog:!


  1. If your buyer is going FHA or conventional then you will most likely have to have some seasoning in the deal (90 – 180 days) before you go to escrow with your buyer.

    You can do this in a number of ways – one is buy using an investor or hard money lender to fund the deal and hold it for six months. Get an option for 3 – 6 months from the end buyer and get an option for 10 – 20% to keep them in the game and offer it as additional collateral to the investor (only if the property doesn’t have a good ITV already).

    Once the 3 – 6 months have past put the property into escrow immediately and move toward closing.

    Hope this helps.


    On all the 5 wholesale steps regarding reo’s, do you need a proof of funds letter if your end buyer is paying cash? If you do, where do you get it, if your not using transitional funding?

    • Hi Janice,

      You will need a proof of funds letter to submit with your offers if you’re going after REOs. If you don’t actually have access to your own cash, you can get a letter from a transactional lender, which will work in most cases. If you don’t have a letter and you’re making a cash offer on an REO, the listing agent will not submit it. It’s something that is required 99% of the time.

      Hope that helps!

  3. Hi Steph,
    How do you handle the double set of closing cost in a back to back or in a doubleclosing. I’m in PA and only the transfer tax here is 3%? for instance in a $100,000 you will have to pay $3000 0n the first transaction and if you sold it for $ 115,000.00 you will have to pay another $3450, that is$ 6,450 just in transfer tax only?????
    I’m a short sale investor and what I do is I negotiate with the lender(Bank) that they will pay all closing cost but title insurance and I never purchase a title insurance anyways because I hold it just for a few min.So No Closing on A-B to me

  4. Stephani,

    I am just getting into this REO wholesaling so this might be something that has already been answered else where but will appreciate your reply.

    If I am putting cash offer on REO with proof of funds as you mentioned earlier, how much minimum earnest money would be required which will get my offer accepted by HUD or selling bank. Also if I am not able to find an end buyer within certain amount of days as mentioned in contract I understand that earnest money will be non-refundable. Is there any way to get that earnest money back or part thereof back from the bank provided I have put 5% or so in earnest money while signing the contract or any other strategy which you have in this regard.

    Also has it happened to you where your offer got accepted but you couldn’t find an end-buyer within the term of the contract and how you dealt with it?


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