Posted by Bill Gatten on February 04, 2001 at 15:02:15:
Tell your seller that he needn’t give you the title at all, that you’ll merely make all of his payments for a month or two and then pay off his loan.
Place the property into a land trust (in his name, if that makes him feel more secure) with you as the trustee and only beneficiary (*or you can take only a partial beneficiary interest, along with an agreement from the seller that he?ll forfeit his beneficiary interest to you when the trust terminates and when his loan and/or any sums owed to him are paid in full). If you’re going to hold the property for more than a few months, then you might need to do it all via a PACTrust, but for a quick flip or refurb, that’s not always necessary.
Next, as the trustee (with full power-of-sale), at the direction of the beneficiaries (you, and the former owner by means of an Assignment of Power-of-Direction) sell the property to a qualified buyer for enough to pay off the loan and line your pockets (or your pickup bed) with a few shekels.
Obviously doing it this way cuts down on paper work, avoids double escrows, by-passes seasoning requirements, avoids seller consternation (makes them feel a little warmer and fuzzier), etc. (Just another topic to be covered at our round-table discussion at the CRE Convention (and at our Jacksonville workshop next Saturday)