Frequently Asked Questions
What do I need to do to sell my house to you?
Does the seller get future appreciation of the property?
What if I need to get a loan to buy another house?
What type of sellers do you work with?
What is the cost? Who pays it?
How do I get started? What is the process?
What do I need to do to sell my house to you?
We are looking for sellers who:
- are selling on their own. That means there is no agent or broker involved.
- are willing to stay on the loan for a while.
- are willing to keep their equity intact for a while.
In return we pay the mortgage payments, property taxes, insurance, maintenance and repairs then after an agreed period of time we will either refinance the property in our name or sell the property and pay off the underlying mortgage as well as seller's initial equity.
You sell your house in a short time at mutually agreed fair market value. You save on traditional costs involved in selling a real estate such as commission, transfer tax, title insurance, etc. The processes can be completed in as short as one week.
- A legitimate “take-over” of an existing loan’s payments, without formal loan assumption or violation of a lender's alienation protection re. its "due-on-sale” provisions.
- A better ‘selling price.’ In view of the many benefits derived by an offeror, our Mutually Agreed Value (“MAV”) is typically higher than a standard “purchase offer”.
- A faster sale and shorter escrow.
- Avoidance of the IRS’ imposition of tax on debt-relief (with reference to an over-encumbered property) when foreclosure or “short-sale” are the considered options. The Equity Holding Trust™ seller needn’t destroy his/her credit and walk away with nothing to show for all those years of expense and hard work (see #13 below).
- Freedom from loan payments that may no longer be affordable, as well as an escape from escalating insurance and maintenance costs—in that the resident beneficiary generally pays all such costs.
- Enhanced income and profit potential, compared to what renting or leasing can provide.
- Elimination of one’s negative cash flow, management costs, maintenance and vacancies.
- Gross rental income is often increased by 150 percent (or can even be doubled in many cases), while net rental profit can be quadrupled and quintupled by virtue of one’s being able to control and assign the income tax benefits.
- Protection from possible injurious actions of the “other party,” (e.g., a resident’s non-payment, disrepair, disregard or damage to the property).
- In comparison with any other seller-assisted financing arrangement, The Equity Holding Trust™ shields the property from an errant resident’s tax liens, lawsuits, bankruptcies, judgment liens or marital disputes.
- Ease of collection of the resident’s payments; disbursements to creditors; late notices; and any necessary admonitions, evictions or other legal processes—because the seller need not ever handle these functions.
- Ease of eviction and avoidance of the anguish and expense of judicial foreclosure, ejectment and quiet title actions to regain possession following a buyer’s default. A prominent advantage of the Equity Holding Trust™ over other types of seller assisted financing is that it allows for a standard eviction and unlawful detainer process rather than necessitating foreclosure.
- Possible participation in the profit potential relative to a future sale, while throughout the term of the agreement someone else has paid all the bills and handled all the maintenance and repairs.
- Seller could opt to retain—along with any beginning equity—a percentage of the property’s future profit potential. The justification for such participation might simply be one’s having obtained the original loan, having made the original down payment; and/or remaining at risk [re: the continuing mortgage responsibility] on behalf of the buyer.
You can sell your property for fair market value quickly and legitemately.
Does the seller get future appreciation of the property?
Yes, if you partner with us on this transaction.
No, if you would like to walk away and have nothing to do with the property.
What if I need to get a loan to buy another house?
That is not a problem. Even though the loan shows up on your credit report, we provide documentations to the new loan's under writer which will give you 80% to 100% debt to income credit. In most cases our documentation results in close to 100% credit. This will result in much better debt to income credit than leasing or renting out the property as it is a sale in progress and there is no vacancy, repair, or other monthly costs involved.
It can be done in one week. It is just the matter of collecting and sending required documents to escrow.
What type of sellers do you work with?
As long as the seller is willing to stay on the loan for a while and keep their equity (if any) intact for a while we can proceed with the transaction. Here is a list of seller types that we have worked with in the past.
- Over-encumbered properties (upside down)
- No Equity in the property or not enough to cover the cost of traditional sale of real estate.
- Tired Landlords
- Tired For Sale By Owner
- Expired listings
- Foreclosures
- Code enforcement violations
- Abandoned properties
- Divorces
- Job Transfers
- Delinquent payments
- Death
- Retirement
- Financial distress
- Lease Option, Rent to own, For Rent
- Delinquent taxes or tax liens
Step1: we place the property into a beneficiary directed, title-holding land trust with a third party corporate trustee in the name of the seller. Although the use of the land trust in our context is to effectively provide the safest and most secure means of transfer of ownership interest: the land trust itself can be employed for myriad other reasons. Here are just a few of them:
- For privacy, estate planning, probate avoidance and assets protection
- To enable one to convey all tax benefits to any party in the transaction that he/she would choose...without title transfer...in order to command 150% higher rents and eliminate all costs of vacancies, management, maintenance, etc.
- To avoid compromising the due-on-sale clause in the underlying financing relative to owner-financed transfers
- To shield the property from virtually all legal threats and potentialities: from marital disputes and creditor judgments to BK's and tax liens
- To make our purchase by payment-assumption simpler and easier, since the seller can be so well protected while staying on the loan, and never have to worry about you or the collection and disbursement of payments. And neither does he ever have to put your name on title until we are ready to sell or Re-Finance
- To make our selling (or other disposition) easier, since the buyer can be so well protected while assuming payments on existing financing
- To make "sandwiching" easier, since the buyer and seller needn't ever be concerned about the potential for untoward or illegal actions by, or personal problems of, the person remaining on the loan: or of the person living in the property and making the payments
- To shield the buyer against illegal or illicit Foreclosure or Unlawful Detainer by the Seller or Non-Resident Beneficiary without just and appropriate cause
Step 2: A co-beneficiary interest in the trust is assigned to seller (YOU) and buyer (US...a would-be homeowner). This assignment is done versus a sale or transfer of the property's legal or equitable title in order to shield the property from all forms of attack by creditors or dissent among beneficiaries (title is held by a bona fide third-party trustee for the shielding of the property and for the mutual benefit and protection of all parties).
Step 3: In a completely separate action and with Then the assignee (now a co-beneficiary) in order to gain possession and tax benefits leases the property from the trust on a "triple net lease" basis (i.e., refers to a lease that contain a contractual obligation to pay all costs of ownership and possession: i.e., interest property tax, insurance, etc.), thereby having succeeded in obtaining 100% of ALL the benefits of real property (home) ownership...and then some*:
- Full income tax write-off for mortgage interest
- Full income tax write-off for property taxes paid
- Equity build-up resulting from principal reduction in the underlying mortgage loan
- Potential for profit from appreciation in the property's market value over time
- 100% of the property's Use, Occupancy and Possession
- The right to sell, sublease or rent out the property (or do nothing) with concurrence of all trust beneficiaries
- Protection from a deflation of property value (at the end of the specified trust term, should the property have lost value, the resident beneficiary is free to walk away and pay nothing further...without penalty.
- Privacy of ownership: i.e., all ownership is secret, silent and unrecorded in the public record
- A shielding of one's property from the ravages of creditor liens, tax lines, lawsuits, bankruptcy claims, marital dissolution issues and Probate
- The ability to buy with minimal up-front cost, without new mortgage financing and without compromise of the existing lender's alienation (due-on-sale) admonitions.
At Termination:
In a typical transaction, the contract provides for the
resident beneficiary (US, the buyer) to either sell or refinance the property, and
pay the seller all monies due from the proceeds of such sale or
other disposition at that time.
In simple words, we refinance the property in our name or sell it. From the proceeds, we pay off the underlying mortgage (your loan) and your equity. Basically, you get the mutually agreed price of the home at termination.
What is the cost? Who pays it?
Just like all real estate transactions there is a closing cost involved. The seller pays for half of the closing cost and we pay for half. The closing costs involves escrow fees, documentation fees, trust setup fees, third party non-profit trustee corporation fees, etc.
Yes. We have done hundreds of transactions in many states. We can put you in touch with happy sellers who have worked with us before.
How do I get started? What is the process?
- Contact us by phone or on line
- We meet with you and agree on a mutually agreed value.
- We send you a proposal based on mutually agreed value that explains the process in details along with costs involved.
- We will give you ample time to think it over and consult with real estate attorney and your accountant.
- We will answer any questions that you or your attorney or accountant might have.
- During the decision making time you can continue market your property as before and sell it with no obligation to us.