Land Trusts (3)

Archive for the 'Land Trusts' Category

Using the Title Holding (Land) Trust to Rescue Jumbo Sellers

April 19th, 2010 categories: Land Trusts, Seller Financing

A coaching client of mine, Brian Gibbons, turned me onto an article in USA Today that I hadn’t seen when it first came out:

Upscale Home Sales Lag as Jumbo Loans are Hard to Get

The Title Holding (Land) Trust is really saving these desperate sellers (and buyers!) Recently we put together a deal that:

preserved $400,000 of the seller’s equity (equity that didn’t really exist at that point in the market)
allowed the seller to defer capital gains on his primary residence
allowed the seller to get out from under payments that had become oppressive. (He was paying $7,000 per month when he had already bought another $2.3mil property to live in . . . he was carrying 2 jumbo mortgage payments! Ouch!
allows the investor/buyer to get the benefit of the existing property tax basis, which is much less than if she were closing on the property conventionally

When banks say NO, I say YES!

Don’t miss a post, sign up for the feed!

Spoken by Dawn Rickabaugh | Discussion: No Comments »

Will I Get My Homeowner’s Exemption if I Offer Owner Financing?

January 5th, 2010 categories: Land Trusts, Seller Financing

Here’s an email that floated in this morning . . .

“Hi, I just did a google search and found your site, so much info! Basically if I’ve owned and lived in my home for 3 years, and now thinking of doing owner finance (still have a mtg), can I still get my $250K exemption with owner carry? How is that generally structured? Say they don’t have great credit, but have $20K to put down but want a 15 year carry, do I have to claim that income each year? Thanks, Joy”

Dear Joy,

Although my standard disclaimer is that I’m not an accountant and that you should consult your own before selling property or paper . . .

My understanding is that yes, you will retain your home owner’s exemption when you transfer title, regardless of how the property is financed. If you use the Title Holding Trust to assign an interest in the property to a Resident Beneficiary, it’s a moot point until the trust is terminated anyway, as it won’t count as a sale until then.

There are just a few questions you’ll probably want to ask yourself as you consider putting this deal together:

Based on the value of my property, is $20,000 a strong down payment?
If they default, what will it cost me and how long will it take to regain possession of the property?
Do I have good underlying financing to leave in place for the next 15 years?
What would the buyers and I do if the bank decided to ‘call’ or accelerate the loan?
Am I willing to leave some of my equity on the table now in exchange for a piece of any appreciation down the road?
What do I really need out of this transaction?
Will there be a negative cash flow? If so, how easy will it be for me to absorb it? Will it affect my quality of life?

There’s more, but this would be a good start. If you haven’t already, sign up for Seller Financing on Steroids at the top of the site.

If you’d like some help making sure you don’t have some unexpected regrets down the road, you can always hire me to be part of your professional team. I’ve recently revised my fee structure.

Additionally, I’ll have a teleseminar you can sign up for later this month if you like.

Best wishes,

Dawn

Spoken by Dawn Rickabaugh | Discussion: No Comments »

Owner Financing and the Title Holding Trust Helps High End Home Avoid Foreclosure

December 11th, 2009 categories: Land Trusts, Seller Financing

Hey, I just got this audio file put together, and I think anyone interested in preserving their real estate asset by transferring it with the existing financing in place might be interested in listening in. It’s a little long… about 9 minutes or so, but I think it’s worth checking out: