Posted by DaveD (WI) on April 24, 2007 at 15:22:00:
I meant “escrow” when your buyer eventually re-fies and cashes everyone out. You rightly want to keep the notifications to a minimum until then. I think Bronchick has that whole scenero pretty much figured out paperwork-wise.
Can you wrap twice and use an AIDT? - Posted by Kristine-CA
Posted by Kristine-CA on April 22, 2007 at 11:18:03:
Greetings. If am taking property subject-2 and selling to a tenant/buyer, can
I use an all-inclusive deed of trust on both the purchase and sell? I would
like to execute the paperwork in such a way as to avoid a lease/option. I
want the end buyer to be purchaser, not a l/o buyer, and I want recorded
docs that cover all the encumbrances.
Let’s say I get the deed on a property where $150K is owed and seller wants
5K, but he is willing to wait for his payment. I can sell to a tenant/buyer for
$200K. So I take the the property subject to the financing, with the seller
essentially carrying back the 5K. I execute an AIDT in favor of the seller for
$155K. I then I sell to a tenant buyer, signing the deed to them and getting a
10K downpayment and we execute an AIDT in favor of me as the seller for
$190K.
So, upon re-sale or refinancing by the end buyer, there would be demands
required from the lender of the 1st, the seller holding the first AITD and me
holding the second AITD.
Putting the issue of due on sale aside here, and I know it’s an issue, is
everyone covered here? I am assuming the the AITD gives the beneficiary
similar recourse to regular trust deeds upon nonpayment?
Is this a possible or good way to keep good financing in place so that it can
be offered to the end buyer? Other than calling the loan due, or foreclosing
for non-payment, does the lender have any other say in the matter?
Thanks for any input or suggestions. Sincerely, Kristine
“Wrap a wrap” - Posted by DaveD (WI)
Posted by DaveD (WI) on April 24, 2007 at 12:14:21:
Also known as double-wrap, re-wrap, etc. No problem. Escrow will figure out who gets what, based on their recording position and pay off demand. You get your 200K, reduced by sellers 155K, which is further reduced by the 150K underlying loan. We use mortgages here, so be sure you use the right paperwork for CA.
Re: Can you wrap twice and use an AIDT? - Posted by Billy
Posted by Billy on April 22, 2007 at 21:35:19:
Kristine
Yes, you could do that but why do you want to complicate it so much and keep extra people in the deal?
Why not just put it all into escrow and give the seller their $5K in escrow and control the 1st and your profit with an AITD you create, which could be sold at a slight discount after it’s been seasoned for awhile.
Billy, for this post anyway
Re: “Wrap a wrap” - Posted by Kristine-CA
Posted by Kristine-CA on April 24, 2007 at 13:42:52:
Hi Dave. I guess that’s my question: which paperwork? Will the all
inclusive deed of trust take care of it on both ends? The other
response I got suggested that I don’t need to do a double wrap. Either
way, I don’t have enough understanding, and I have the deal in front of
me.
The problem with using escrow is that these days they are required to
notify everyone with an interest when executing and AITD. When they
notify the first of the AITD, the lender will most likely notice the
transfer of the deed and the DOS becomes an issue. Unless, perhaps,
the deed isn’t transferred. Oh my, so much to learn. Kristine
Re: Can you wrap twice and use an AIDT? - Posted by Kristine-CA
Posted by Kristine-CA on April 22, 2007 at 22:08:50:
Billy: thank you for your reply. I’m a little confused about your
suggestions.
When you say put everything in escrow, what exactly does that mean?
When you say extra people, who do you mean? The seller? Me?
I’m have no personal experience with wraps, so a lot of the concepts
and lingo are new to me.
Would it be possible for you to briefly outline your preferred actions on
this kind of deal. I really want to understand this. Thanks, Kristine