Posted by Bill Gatten on January 08, 2001 at 20:57:21:
Hi Anna,
Good call, but this may not be a PACTrust deal.
The buyer on this one can indeed take control now and worry about the refi later on; however, the main issue on this one seems to be getting the seller all of his cash out now, and there doesn’t appear to be enough equity to so at hard money rates. The other option, of course, is to have the seller re-fi to as high an LTV as possible, put the cash in his pocket, and then put the property into the PT with the buyer. A Power of Attorney would then be taken from the seller to allow the buyer to direct the trustee in dealing with all matters of the property and its title: with the exception of matters pertinent to his own eviction and/or dissolution of the trust for cause.
Later on, when it was most comfortable, all steps toward sub-division could take place without a lot of input from, or involvement by, the seller. The resident beneficiary would merely need to be apprised of the plans for the future and be willing to enter the deal aware that such sub-division would eventually be taking place.
As an enticement, perhaps th buyer could offer a little hiher price in order to get better terms (assuming a long-term hold the appreciation due to the sub-division would pay that higher price nicely with nothing out of the buyer’s pocket.
Bill Gatten