Buying a Trust vs Sub To

[Donald DiBuono]

I recently watched a video on social media that mentioned the way he was buying properties and yielding the benefit of the sellers low interest rate is having the seller put the property in a trust and then purchasing the trust. In his words, this is away around the due on sale clause that you can run into in a sub - to transaction.

My question - if the seller puts the property in a trust, will this avoid the potential of a due on sale clause?

[Ken M.]

Quote from @Donald DiBuono:

I recently watched a video on social media that mentioned the way he was buying properties and yielding the benefit of the sellers low interest rate is having the seller put the property in a trust and then purchasing the trust. In his words, this is away around the due on sale clause that you can run into in a sub - to transaction.

My question - if the seller puts the property in a trust, will this avoid the potential of a due on sale clause?

I believe the idea is that if you transfer a property from your name to a trust you own, the Due On Sale isn't called.

I always buy Subject To, I do not put it in a Trust, I use my own LLC and I never have a problem. I wouldn't buy a Trust or LLC from anyone since whatever liability they have comes along with it. They key is to not act like you are "hiding" something. That will get you into trouble. The court considers "open and notorious" to be in your favor as opposed to being sneaky and deceptive.