Can I create a note on a house I own and sell it? - Posted by Preston Clark


#1

Posted by John Behle on October 23, 1998 at 14:02:32:

You can create a note and sell it provided you check around with buyers first. That type of transaction would weed many of them out.

But, you can’t really create it to yourself. Legally it can essential cancel the note. That is also a problem in buying your own note back. Create it to another party, corporation, trust, etc. If you buy a note back, you might want to also buy it in another entity to keep it alive. Why?

It’s a CYA technique (Cover Your Assets). A note is an IOU. If it is to your corp, trust or another person that is “controlled”, then you have what I call an I.O.ME. As far as asset protection, it is very dangerous to have equity in properties that is wide open to view and attack. So until you get some trusts or whatever, cover the equity with notes. It may make the difference between a lawsuit. If done right, it may be able to hold up if challenged. Possibly not - but - the first thing someone does if they want to consider a lawsuit is an asset search.

Everyone is at risk for lawsuits. You could have a car accident or someone falls on a property or whatever. They or their attorney will likely want to know if there is the possibility of collecting if they should win. They can check out your real estate. Lots of equity - they’ll sue. Mortgaged to the hilt - they may send a sympathy card and forget the suit. Need a loan or need to show the asset? Show them a Reconveyance, just don’t record unless you need to.

Also, if you create a note of any kind, make sure there is a “First Right of Refusal” clause to be able to purchase your own note back if the other party ever tries to sell. It can save you tens of thousands.


#2

Can I create a note on a house I own and sell it? - Posted by Preston Clark

Posted by Preston Clark on October 23, 1998 at 10:25:19:

If I own a house with a lot of equity, and have it rented, can I create a note from myself to myself and sell the note instead of getting a new bank loan? The rent is twice the amount that my new payment would be. Who buys this type of note?