Hello, a wholeseller is offering this property he picked up, so far it looks like a good deal, he says the house is in a trust and i would be the beneficiary? Ive never purchased this way and will def not move forward unless i fully understand the transaction. Does anyone has experience doing this type of deal that could explain to me how it works even before i considering going to an attorney.
This is an old post, but in case you still need help I can answer your question. The property is purchased with the name of the land trust as the buyer. Every land trust has a trustee and a beneficiary. The trustee always stays the same and is the one who signs the documents, but the beneficiary is the one who receives whatever is being purchased, and pays for it. Basically, the trustee is the middle man. The seller and others involved don't ever have to meet the beneficiary, so the beneficiary can change all the time. The position as beneficiary is what is assigned for a fee. This is a very effective way to purchase properties because it makes the seller more comfortable... to the seller's viewpoint, he sold to a trust and even after the contract was assigned, the seller is still selling to the same trust. An interesting fact about purchasing properties through land trusts: Walt Disney purchased land for Disney Land through land trusts. No one knew who was really buying up the land, because if they did know it was Disney, they would have gouged the price and others would want in on the land, too. It's a good way to purchase in secret.
Thanks Blake! We are in the process of buying our first wholesale deal in this exact way! Your explanation was really REALLY helpful. Thanks!
I know this is an year old thread but I am trying to understand how the beneficiary can change without the original beneficiary's consent if he still alive?
The beneficiary Is the one selling it to you. Typically this is just done with REO properties to avoid any assignment/double close restrictions. The wholesaler/flipper is the one who sets up the land trust and contracts with the seller thru it.
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