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Buying a house investor style, low down/easy qualifying

Nugga Boo

Member
......well, I 've been living in my home on 5 acres for 5 years. It's still in the land trust and my name is nowhere. I paid the mortage up-to-date when I got it(17K) and they walked. I saved thier credit rating and I am about to close shop here with the mmj and get this in my name. I've never missed a payment and I am ahead about 40K in equity, which would have been well over 200K if not for this market. And yes they paided a high rate--6.5% which I've done through the years as well. The best part is is that I've had a blast all the way with my 'ghouse.' Now I am all legal and have to keep it under 30 plants with roots(I am provider to one).

But the point I am making is that dont bash these ideas unless you've done it.....I had a dream of making this work, and it did. I never got carried away; kept it all under control. And NOBODY has ever yet to step in my garden except myself......Live by Rule #1

peace!
gman


An inspiration to us all and a nice real life example of the techniques in this guide put to work.
 
Wait, I am confused...

When title on a house changes, the county recorder will not allow a change in ownership unless all liens are cleared (i.e., paying off the current mortgage). No title company worth its salt will provide title insurance on a a transfer of property ownership, since the whole point of title insurance is to guarantee that the buyer becomes the legal owner of the house. But, since the county recorder will not allow transfer of ownership due to the seller's outstanding, unpaid mortgage, the title company would be liable to the buyer for a guarantee that is not true.

The OP doesn't seem to address those issues; it assumes those are not factors in a real estate deal, which they are.

If you have more insight into those issues, I would love to hear them.
 

growinman

Member
Wait, I am confused...

When title on a house changes, the county recorder will not allow a change in ownership unless all liens are cleared (i.e., paying off the current mortgage). No title company worth its salt will provide title insurance on a a transfer of property ownership, since the whole point of title insurance is to guarantee that the buyer becomes the legal owner of the house. But, since the county recorder will not allow transfer of ownership due to the seller's outstanding, unpaid mortgage, the title company would be liable to the buyer for a guarantee that is not true.

The OP doesn't seem to address those issues; it assumes those are not factors in a real estate deal, which they are.

If you have more insight into those issues, I would love to hear them.

Well, the way it worked for me and the way it works is simple: Your just 'assuming' the mortgage, keeping the payments up. The title insurance company never knows anything different than the bank knows. You make the 'Trust' and the original owner fills out your paperwork, Quit Claim, etc., and noterized(sp!), and that goes in the Trust. The previous owner now has no rights whatsoever. The only place your name ever shows is if YOU pay the taxes yourself if they are in arrear---
In my case I did pay the taxes and my name always showed up in the county records as the tax payer---it could have just as well been a friend of mine......his name would have showed. But I never again was late on the mortgage pymnt and it(escrow) paid taxes and title ins. A couple of years, for some weird reason, the bank statement came in my name and the previous owners both......then back to just him, even though I always paid by personal check and have every one of them.
When I had over 85-100K(less now--market) in equity I only owed 85K I got a private lender who paid off the mortage and I can get it in my name 100%, albeit still in a trust----I dont think I 'd ever own without that protection, with the field I come from.......
The OP should be able to answer this stuff a lot better than myself. I am just telling you it works........and I never had any issues at all!

peace
gman
 

dtfsux

Member
How is somebody walking away from a mortgage? You can give it back to the bank free and clear if they are on their 1st mortgage. If their is a 2nd mortgage it is not so easy especially if they are underwater. They can't just give you the monthly payments,the debt would remain in their name.You can't transfer the debt as is without satisfying the bank that you have the income to satisfy the loan. A lot of mortgage payments being made are higher then rentals due to ballooning rates. So taking over someone elses nightmare doesn't sound so appealing.


did you read the whole post? I already stated the debt would stay in their name. As i stated I HAVE bought houses this way, closed by an attorney. It is 100% legal and done all the time.

The goal here is to acquire a house that YOU own to grow in. No landlords to pop in. Not to make a profit or have positive cash flow

Most homeowners are not aware they can turn the house back, and that is only if the bank agrees to deed in lieu of foreclosure. Most homeowners dont want to be bothered. Over them $500 cash to help with moving expenses etc.

The advantage to the homeowner is payments continue to be made, keeping a foreclosure off their record, and improving their credit




Me personally, I would rather pay a little more monthly to have the security of no LL
 

dtfsux

Member
......well, I 've been living in my home on 5 acres for 5 years. It's still in the land trust and my name is nowhere. I paid the mortage up-to-date when I got it(17K) and they walked. I saved thier credit rating and I am about to close shop here with the mmj and get this in my name. I've never missed a payment and I am ahead about 40K in equity, which would have been well over 200K if not for this market. And yes they paided a high rate--6.5% which I've done through the years as well. The best part is is that I've had a blast all the way with my 'ghouse.' Now I am all legal and have to keep it under 30 plants with roots(I am provider to one).

But the point I am making is that dont bash these ideas unless you've done it.....I had a dream of making this work, and it did. I never got carried away; kept it all under control. And NOBODY has ever yet to step in my garden except myself......Live by Rule #1

peace!
gman


glad to see someone else who can verify that it works
 

dtfsux

Member
Wait, I am confused...

When title on a house changes, the county recorder will not allow a change in ownership unless all liens are cleared (i.e., paying off the current mortgage). No title company worth its salt will provide title insurance on a a transfer of property ownership, since the whole point of title insurance is to guarantee that the buyer becomes the legal owner of the house. But, since the county recorder will not allow transfer of ownership due to the seller's outstanding, unpaid mortgage, the title company would be liable to the buyer for a guarantee that is not true.

The OP doesn't seem to address those issues; it assumes those are not factors in a real estate deal, which they are.

If you have more insight into those issues, I would love to hear them.

I believe you are wrong about the recorder not allowing title to change unless liens are paid off. Lenders want liens paid off before they issue a loan but I do not think the recorder cares. I bought TWO houses exactly how I described. I took title (no land trust in those cases) and mortgage stayed in sellers name. I was an authorized person on the account so I could call about payments etc.

People quit claim houses, put them into trusts etc all the time. I have quit claimed property before.


My atty did title search and I am pretty sure we got title insurance as well.
 

McDanger

Member
......well, I 've been living in my home on 5 acres for 5 years. It's still in the land trust and my name is nowhere. I paid the mortage up-to-date when I got it(17K) and they walked. I saved thier credit rating and I am about to close shop here with the mmj and get this in my name. I've never missed a payment and I am ahead about 40K in equity, which would have been well over 200K if not for this market. And yes they paided a high rate--6.5% which I've done through the years as well. The best part is is that I've had a blast all the way with my 'ghouse.' Now I am all legal and have to keep it under 30 plants with roots(I am provider to one).

But the point I am making is that dont bash these ideas unless you've done it.....I had a dream of making this work, and it did. I never got carried away; kept it all under control. And NOBODY has ever yet to step in my garden except myself......Live by Rule #1

peace!
gman

Congratulations. I too have done this at least 10 times with different methods. You do not need to put the house in your name, and I would not. You could still be sued personally for something that has nothing to do with the house (car accident), and some shitbag lawyer will come after any equity in the house. Better to keep it in the trust, for the privacy if no other reason. You can still go legit and refinance in the name of the trustee with no personal liability on you, just in case.
 

McDanger

Member
I believe you are wrong about the recorder not allowing title to change unless liens are paid off. Lenders want liens paid off before they issue a loan but I do not think the recorder cares. I bought TWO houses exactly how I described. I took title (no land trust in those cases) and mortgage stayed in sellers name. I was an authorized person on the account so I could call about payments etc.

People quit claim houses, put them into trusts etc all the time. I have quit claimed property before.


My atty did title search and I am pretty sure we got title insurance as well.

On the transfer return in my state, which is all the recorder sees, there is not even a place to put any mortgage info. They are recording the deed. Any lien would be recorded separately by the lender.
Great post :thank you: One thing to think about. If you buy with the sell giving a quit claim deed, make damn sure somebody does a very thorough title search. I was burned on this once, I still made out because the price was still low enough to make up for the unpaid tax lien that was only attached the day before the sale. I only found this out when I tried to refi a year later since it was not on the public records on the date of sale. You can still use a warranty deed, even without title insurance, and you can get title insurance (which I should have) with a quit claim deed. This is the reason for gap insurance.
Can you tell I love this topic?:bump:
 

McDanger

Member
How is somebody walking away from a mortgage? You can give it back to the bank free and clear if they are on their 1st mortgage. If their is a 2nd mortgage it is not so easy especially if they are underwater. They can't just give you the monthly payments,the debt would remain in their name.You can't transfer the debt as is without satisfying the bank that you have the income to satisfy the loan. A lot of mortgage payments being made are higher then rentals due to ballooning rates. So taking over someone elses nightmare doesn't sound so appealing.

When you use a land trust the bank never knows that the property changed hands. The property is transferred to the trust by the seller (transfers for estate planning do not trigger the due on sale clause) and then the beneficiary of the trust is changed from the seller to you. The trust is a private document that is not recorded.(very important, never record a trust document)And make sure you trust the person you pick as a trustee, since that is the person that will be found in any search for the owner.
You cannot just give the property back to the bank, they have to agree to take it, and they don't want it. I just tried to do this last year on a 30 unit apartment, and they would not do a short sale or a deed in leiu. Ended up letting it go to foreclosure and the starting price at auction was $25k less than was offered on the short sale.:yoinks: Go figure:moon:
 

dtfsux

Member
McDanger good input, glad to see someone else who has experience in this area.

Banks are weird sometimes, I have so many things, its crazy
 

61-50-7

Member
A new mexico llc might be another option to title the house with. Completely anon. and cheap. You have the issue of how to pay the bank but other than that...you're in..
 

Anti

Sorcerer's Apprentice
Veteran
Anyone interested in detailed explanations of how to do this should look up Robert Allen on your favorite torrent search.

Rob Allen details many ways to do transactions of this sort and how to flip them for profit.
 
M

Mr.Howie

How are the people selling ok with leaving the loan in their name for an extended period of time? Basically their credit rating is hanging on you paying the mortgage? Can't imagine people doing this that have 15-20 years remaining on their mortgage. Wouldn't they be relying on you to pay their payments for the remaining timeframe of loan?

Trying to understand the big picture of this and would like to see it from the other side....the sellers side. Are you responsible for their risk in selling you the house this way?
 

zenoonez

Active member
Veteran
How are the people selling ok with leaving the loan in their name for an extended period of time? Basically their credit rating is hanging on you paying the mortgage? Can't imagine people doing this that have 15-20 years remaining on their mortgage. Wouldn't they be relying on you to pay their payments for the remaining timeframe of loan?

Trying to understand the big picture of this and would like to see it from the other side....the sellers side. Are you responsible for their risk in selling you the house this way?

This practice isn't aimed at people who are ahead or on time with their mortgage. This is a way to essentially save their credit and give them a future second chance at the American dream effectively preventing foreclosure. A lot of investors who do this let the people live in the house for one year for very little rent as a way to make sure there is cash flow immediately. Others who have enough money immediately pay the mortgage off, kick the people out, fix the house up a bit, have it reappraised and borrow all of the equity out of the home to put into a new property, risky shit but it makes for OUTRAGEOUS growth of wealth.
 

headband 707

Plant whisperer
Veteran
Growing in a house is not the greatest idea LOL.. If you only had a few plants then great but obviously the more plants you have the wetter your place is going to get atleast here in BC. If your going to go that route I would suggest you have your airflow in your grow set up properly because mold in a house will kill your future sale lol peace out Headband707
 

Critter

Think for yourself, question authority
ICMag Donor
Veteran
uh lots and lots of people grow in houses. Proper vent or cooling is normal...You must have seen a lot! lol ;)
 

SMOKE-ONE

Member
If you are buying from a homeowner/investor,using owner-finance,is it better to use a land trust or annonymous LLC.What are the pro's and con's of each?
 

huntingbb

Member
If you are buying from a homeowner/investor,using owner-finance,is it better to use a land trust or annonymous LLC.What are the pro's and con's of each?

Use the LLC for all financial transactions if you can afford one. this does NOT preclude using a trust as well. LLC will cost 2500-5k/yr to keep up properly iirc.
 

headband 707

Plant whisperer
Veteran
uh lots and lots of people grow in houses. Proper vent or cooling is normal...You must have seen a lot! lol ;)

Yeah I have seen lots of houses with mold and here they make a huge deal about it and go to town to try and get it out of your house and they will charge you a fortune to fix the problem so yeah be very careful with your investment it really doesn't take too long before you run into trouble .. There really is a reason landlords don't trust ppl that would grow in their places lol and it has nothing to do with bud lol. peace out Headband707:)
 

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