I have a question for anyone that has been successful getting their tenant buyers financed.

I have multiple lease option tenant buyers. I hold the title in a land trust with the beneficial interest being my LLC. The lease and option agreements are made with my LLC. I have only had one tenant buyer cash me out since Frank Dodd and it was a nightmare. The lender had an issue with the option agreement being in the LLC name and not the Land trust. They would not give them credit for the option payment toward the down payment because it was paid to the LLC. Then the title company would only issue a check to the Land Trust and not the LLC. I had to get an EIN for the land trust then open a bank account just to deposit the funds.

Any Ideas on how to set this up better in the future?

Thanks,

Mark

You listed problems, that is your receipe for repeating those problems again right?   

I hold long term rentals in land trusts too, but anything short term I would definately make it easier to sell.  Now that you've received that "education".

REI is a knowledge business. You need to take education from McCall and Crump on how to handle the option payment so that the eventual lender will take it as down payment. There's 2 scenarios for how this can happen and the bank is more likely to accept the optoin payment goes toward the down payment. Its just not possible to give a books worth of educatoin in one reply. I am saying though that it is possible to properly handle the option payment so that the tenant buyer will get credited for that amounbt toward the loans down payment.

ALSO some lenders are more creative friendly then others.   I suggest you call around and find the non-national bank lenders, maybe credit union, maybe national loan brokers,,, finance of america (tip), who will help you structure the deal before you lease up the tenant.   Its all cast in stone at lease up time.  Don't do it right there's no fixing it post lease up.

Joe McCall and Joe Crump both teach lease option, wholesale lease option, both are great guys and reasonably priced LO training. 

I only hold in an entity if doing a LOA.  Long-term hold LOs and SLOs principals stay in natural persons name, acting above board, sans 'sophistication'.

Lender's and title don't like anonymity, what they don't understand or lots of moving parts plain and simple. 

I guess I have always been taught to keep title in a Land trust for Liability and anonymity reasons. So, you are saying if you do a lease option agreement with a tenant buyer you would have the home titled in the LLC name and just forget the Land Trust? I do not do SLOs...been burned to many times. I know I cannot fix the past. I am just looking to set up new deals and renewals to make cashing out smoother.

Originally posted by @Mark Struck :

I guess I have always been taught to keep title in a Land trust for Liability and anonymity reasons. So, you are saying if you do a lease option agreement with a tenant buyer you would have the home titled in the LLC name and just forget the Land Trust? I do not do SLOs...been burned to many times. I know I cannot fix the past. I am just looking to set up new deals and renewals to make cashing out smoother.

For regular LOs, mine have the Optionor as the original vested party and the Optionee as the TB. If you're vested as an LLC day 1, do it as that. If you're QCing from your name to an LLC you will most likely have title chain and title insurance issues for you and your TB. TBs lender will also raise eyebrows. Vesting needs continuity in my experience.

For LOAs, I haven't had problems using an entity.  I have a PM s-corp that sounds like it could be any number of things like a capital partner or affiliate.  Have had no troubles in that niche.

I give up...what are a LOAs? :)