Posted by Darwin on March 12, 2002 at 23:41:05:
How do you start a " Trust " LLC? What forms do you need?
assignable contracts - Posted by B Dixon
Posted by B Dixon on February 22, 2002 at 12:18:31:
What’s the best situation to use these? I’ve tried them with regular sellers (novices) and they won’t go for it. Their lenders, and listing agents advise them not to accept these types of offers. Does anyone have any experience/advice for dealing with this type of offer? How do you get the seller to accept? In what situations/sellers are these best for?
Re: assignable contracts - Posted by JohnBoy
Posted by JohnBoy on February 22, 2002 at 18:53:01:
How are you trying to use these, as is how are you presenting this?
In any purchase agreement I use it has the my name as the “buyer and/or assigns” listed as the buyer.
Never had a problem with it!
If someone does question the “and/or assigns” after your name, then just tell them you haven’t decided on which way you would be taking title to the property yet. You may elect to take title in the name of a trust or keep it in your name, but you need that in their so if you decide to use a trust there won’t be a problem with it!
If you are submitting bids on properties through lenders that are selling REO’s, most lenders won’t allow assignments.
Instead you could set up a trust or an entity like an LLC and enter into the contract naming the trust or entity as the buyer. Then you sell the entity to another buyer which would transfer all rights to any contracts to them with the entity. Then they would close on the contract using the same entity as the buyer since they now own the entity.
Example:
Typically you would enter into a contract using your name as buyer and just assign your contract to someone else.
Instead you set up an entity like an LLC that owns nothing. Then you enter into a contract naming the LLC as the buyer. Then instead of getting your profit as an assignment fee, you turn around and sell the LLC to a buyer for the amount of your profit. They now own the LLC which gives them the contract you have with the seller since the LLC is the buyer on that contract. The new owner of the LLC shows up at closing to close on the contract as the owner of the LLC which is the buyer named in the contract.