Posted by Bud Branstetter on October 30, 1998 at 21:17:02:
Putting the property into the land trust is legal. To transfer the interest is a violation of the due on sale. Fortunately the lender is unlikely to catch you. It does not relieve you of the obligation on the mortgage. The deed is into the land trust not the investors name.
Do you have the cash to close the deal? If so why do you need the investor. Is he putting up any cash so that he has something at risk. You are doing the work of finding and financing. When you wholesale the idea is to sell to an investor for cash. Either you didn’t do your homework and find those investors first or you misread what the property is worth wholesale. Acquisition is typically 70% or less and 75-80% after fix up. Can you make 10-15K profit?
Your ratios will be affected by a loan. There are lenders that will do 90% investor loans depending on credit. If you rent the prroperty many like to give you credit for only 75% of the income while your ratio’s include all your debt. Is it a win win deal for you and the investor?