Flipping REO's via Land Trust
Commercial Real Estate Broker · Fontana, CA · Member since 2008 · 68 posts · 20 votes
I just flipped 3 properties today to a all cash investor using a land trust. I had never done it before and I was skeptical but I closed all three deals same buyer within 3 hours.
Here are the steps if you want to use a Land Trust to flip:
1. Put in your offer as xyz title vesting tba in escrow.
2. Get offer accepted.
3. "Street Name" Land Trust Trustee xyz (whatever buyer that is in Step One)
4. Find a cash buyer
5. Sell your land trust to Cash investor ( Wholesale Fee)
6. Cash Investor is the 100% beneficary
7. He wires money to escrow.
8. Property sold
9. Beneficiary (Cash Investor) fires xyz as trustee and assigns his own trustee for property.
NO EXTRA COST FOR A DOUBLE CLOSE USING TWO ESCROWS
NO EXTRA COST FOR TRANSACTIONAL FUNDING
NO COMPLICATIONS WITH ESCROW AND TITLE
There are a few ways to do that. In an LLC you just fund the LLC. Or show personal funds with a letter stating that you will fund this purchase with personal funds. (not all banks will accept this, some want the buyer, escrow check and verfications of funds letter to have the same vesting)
When you show the personal funds as part of the POF landtrust. You lose the key ablility of the landtrust. The ablity to remane unkown and do business.
This thread is much like the whole REI industry. Hyped up simple information, sold to people with no working knowledge.
There are no secrets in real estate, there sure are no secrets for sale in real estate.
Those than can do. Those that cant GURU.
You have 4 things you need to succeed in this game.
time
money
knowledge
a good credit rating
without those you are pretty crippled in what you can do. The good news. Those fours things can be aquired with a little effort.
Anthony - Thanks for all the great information you have provided. I know it will help others.
If it not too much trouble, can you please send me a copy of your land trust?
Joseph
[email removed]
Anthony,
What amt of a earnest money do you put down and what type of clauses do ou add to your contracts . If at all possible canyou send me a copy of your contract would love to work on some deals here in Chicago and would like to partner on some deals also
How do you go about getting a Reo Listing.
Thanks
Good deal Anthony. A few questions
1. Would we be able to get away by creating the land trust on legalzoom?
2. How do you sell the land trust? Is there a lawyer involved?
Thanks in advance,
Mike
Thanks Anthony! Nicely done!
Could you send me a copy if you haven't reached your limit?
Thanks so much!
Mike
lol where the heck is anthony!? im trying to get ahold of these stupid lawyers so they can help me with the land trust questions and how to do it and none of them answer their phones or call you back! I dont know how they work and have seen one online but couldnt understand a word!
my main issue is i think you said you put the offer in with the land trust name, once accepted assign the benificial intrest of it to the end buyer. I read somewhere or something of some guy doing this too but he put the offer in with his name, assigned the landtrust, HE(guy who put in the offer) went to closing to sign the documents since he put in the offer. confused now lol any help guys. i seriously want to do this tomorrow!!!
Thanks Anthony,
Do you close in the trust name or trustee's name?
We just did a lease option with one of our properties and did it through a land trust. There is an outside of the trust, lease agreement. We will be able to sell to him with no commissions or taxes on the transfer.
Great info.
Jim
Sorry you guys,
You cannot buy this on legalzoom.
You have to get this with a real estate attorney that specalizes in asset holding.
Let me break down the steps:
1. Get a property under contract with your company as the buyer.
2. Send an addendum to have title vesting XYZ Land Trust, "name of your company" as Trustee, for privacy reasons.
3. Find a end buyer.
4. Sell your land trust to your end buyer for your Wholesale fee.
5. Then the end buyer and your agent will continue the closing procedures.
FYI... Your end buyer will get 2 checks. One check for your wholesale fee and deliverance of your land trust and the other check to close on the property.
Anthony, Can you please send me a copy of your Land Trust?
Thanks a bunch!
HI Anthony,
Can you email me your land trust docs. I would like to compare with my FL docs, plus I am VERY curious, especially since my buddy just told me that he was at a closing on one of his REO's and the investor closed on it with an FHA buyer and made $17k...no seasoning issues. :idea: :wink:
Thanks and greatly appreciate it!
can anyone send me a copy of that trust for flippin reo's or the name of the attorney who created it?...thanks
If you are looking for info on Land Trust, steer clear of all the GURU types, they sell dreams, not real estate. Check out Mark Warda's stuff.
Do you have to record the land trust with a grant deed correct, but the beneficiary remains unknown. I am just wondering. I have a property that is in my name,but I would like to transfer into a land trust. I assume, I would have to draw up trust, have it recorded"just the name of the trust gets recorded". Beneficiary remains unknown correct.
Check out http://www.warda.net/LTSC-9.html
FYI, this is a Florida Specific site.
As always, Real Estate is local. Find out how your state handles landtrusts
Doubt all you want buddy, but it happened. Why wouldnt FHA finance property being purchased in a land trust? Please explain if you know the answer.
Truer words have ne'r been spoken!! Make sure BEFORE the fact, that your paperwork is going to accomplish what you want. My state (TN) is one of a few that does NOT recognize a land trust, though you can accomplish the same thing with the usual revocable grantor trust.
regards,
Bill
1. Other than LLC, what can we use as company name for Buyer? Doe this have to be a registered D.B.A. name with the state?
2. After getting under contract, then send addendum to title co. to have title vesting XYZ Land Trust,.. etc.?
3. What is the beneficial interest? Who is the 100% beneficiary...me? I'm the beneficiary and the trustee?
4. I sell the beneficial interest to the cash end-buyer in a private meeting before the escrow?
Thanks so much to all!!
Concerning Anthony's Land Trust:
I imagine that it has already been emailed to 10 requesters already!
Concerning how to successfully submit your REO offers:
Just ask Stephanie to school you about how Lee Kearney - The #1 Wholesaler in Tampa does it.
Lee Kearney does 20, or more REO deals EVERY month! So he "wrote the book" on how you probably want and need to be doing it too.
You can email me privately if you need more information on this matter...
Lee does REO's like this:
1 - "NO contingencies"! PERIOD!
2 - Pay your Realtor "BOTH sides of the
Commission".
3 - Close in 30 days
4 - Call and get the LOCKBOX CODE!
5 - Only work with the Top 10 REO
Agents ( they do 80% of all the
deals!)
6 - Always WIRE your payment to the
BANK, never by check!
7 - DOUBLE CLOSINGS
(NOT "Simultaneous" closings)
8 - $1000 DEPOSIT (or $2000, if lots of
competition)
9 - EMAIL your Offers in (NOT by fax!)
10 - FULL DISCLOSURE NOTICE in all
Contracts!
I look forward to your responses!
[SOLICITATION REMOVED]
darryl dean
Austin, Texas
OK so let me see if i can get this stright.
1 Create a land trust (use whatever name you want. EX: xyz Trust)
2 you will be the trustee and benificiary
3 Use this to put in your offer as (Dwight Droze Trustee for XYZ TRUST)
4 When you get offer accepted by the bank, find a buyer and GRANT TITLE (assign?) to the investor
5 Buyer puts money in escrow and gives you a check for your work
6 After it closes (you sign everything since your the trustee) you DEED the trust to your buyer.
Now ive read through this thread a couple of times. my questions are;
1. Do you register the trust or literally its just a piece of paper until the deal is done?
2. do you use an assignment contract of some sort to assign the benificial interest to your end buyer?
3. do you use any sort of contract other than a land trust to lock your invester in at "purchase price" and collect any earnest money?
4. i would rather have them pay me inside escrow somehow so they feel safer and im paid after closing, so do i simply open another escrow account and give the company the break down on how the funds are being paid and when?
This seems great because if your buyer backs out, you can assign to another buyer without any problems because its a trust not the contract for the house so its personal property not real property right?
I have not read the entire thread, so I would like to ask if anyone has even touched on the fact that many banks will simply reject any offers made in the name of a land trust as they know the game and how it works?
I am not saying it can't be done, because it happens all the time, but it is ALSO the case where banks will simply reject or refuse to respond to offers made in the name of a land trust.
How many of you, and how many times, have you had this occurance?
I know with short sales the land trust won't fly, but I've never heard of anyone having their REO offer rejected because the buyer was a trust.
I know several people in my market who use land trusts to wholesale REOs, and they seem to pull it off just fine.
Perhaps it'd different in other areas, though..
The banks are constantly changing their rules, so maybe it's best to just submit the offer and see what happens. Worst case is they tell you no.
Steph