All Forum Posts by: Richard Zahm

There are specific requirements that have to be met in order to allow you to do this without triggering the Due on Sale clause. 

It's better to be sure up front about what you're doing than to have a nagging sense of uncertainty... You might be comfortable with the "shouldn't be a problem." On the other hand...

Happy to discuss on PM.

They're great platforms and can be used in a number of ways. They're a tool -- it depends on what you're doing and what you want the result to be.

In the Seattle area, Clint Coons @ Anderson Advisors is knowledgeable. I'm happy to discuss as well.

We're providing the opportunities that Bill describes: Direct investment interests in residential real estate using a Land Trust-based structure. We've got smaller investment positions available for investors who either want to diversify across multiple properties, or who lack sufficient 1031 funds to acquire larger properties or nearby properties in more expensive areas ex California coast. Consider liquidity, as well. It's good to be able to get OUT of investments when new opportunities arise.

Cheers, Bryan:

We're taking the opposite view re G-St-J: properly drafted and prepared, DOS isn't triggered. The emphasis is on working with lenders and title throughout the process, emphasizing transparency and knowledgeable parties. 

RZ 

There are distinct carve-outs that allow you to place and hold property in a land trust without triggering the due on sale clause. Mortgage brokers may not be the best source for information on this matter. 

An LT serves more as camouflage than actual "protection." It's one of the benefits frequently touted. The biggest benefit comes from the ability to bring investors into and out of the deal -- LT's provide liquidity.  

The borrower remains the same -- you. The difference is how title is held and recorded. Florida attorney Mark Warda has an excellent book on Florida Land Trusts -- check it out.

There are a number of considerations here:

Are you and the property in Florida?

Is the property an SFR? What are your plans for it short to long term?

Is the first from a private lender?

The LT won't be the borrower -- you will be. There are lenders who are comfortable and familiar with the FL LT structure.

The LT is a great protection device -- but so is insurance. What are you seeking to protect against?

Happy to discuss offline.

My goal is to help California: 

• Homebuyers with their down payments using equity -- not debt
• Homeowners access their home equity -- without additional debt
• Investors: Participate in home appreciation -- real estate investing without tenants or management.

It's called equity sharing. It's a better way to finance homes. It can lower the mortgage amount and eliminate PMI for Homebuyers. It's an easier, less costly way for Homeowners to use their equity -- not just borrow against it.

My experience: real estate law, finance and development. 

Second goal: To help BiggerPocket members navigate through the fascinating world of real estate finance.

Yes, assuming that you qualify for a Home Equity Loan or a Home Equity Line of Credit.

You can also SELL a portion of your equity. You would not have additional debt or interest payments. The investor would then own a portion of the equity in the home.

This situation could be solved using a land trust structure: 

1) Property is conveyed into a land trust. A Trustee holds title.

2) Interests are apportioned amongst the various parties you mention.

3) Due on Sale negotiations with lender take place.

4) Ownership interests are shifted according to who's paying whom and in what amount and when.

Be careful of gifting and lease option elements.