“Many investors are scared of today’s mess in the subprime mortgage market and investor financing from large financial institutions have higher criteria for the investor than ever before,” said Eric Skeeter, Pillar Property Group.
So, how does an investor get property without a bank? Well, the seller who has a low, fixed-interest rate loan can transfer the property’s ownership so buyer can take advantage of seller’s favorable financing without having to establish new financing or utilizing a existing loan.
“Many investors are unaware they can do this with both land trusts and land contract deal,” said Skeeter.
Pillar Property Group would like to take the time to explain the difference between land trusts and land contracts so investors can have a better understanding. Let us examine land trusts and land contracts separately:
• A land trust is a revocable, living trust primarily used for privacy purposes in estate planning and asset protection.
• It used to take title to real estate to provide anonymity for the owner.
• It can also be used with a trust assignment where the seller deeds the property to trust, making him/her the beneficiary.
• The beneficial interest to the investor is the trust is then assigned to a third party, such as an investor/buyer. This is known as a “land trust assignment.”
• A land contract is a financing tool where the seller and buyer agree upon the sale of a property under installment payments.
• The property remains titled in the seller’s name until the buyer completes all payments under the contract.
• This is known as “contract for deed” or “installment land contract.”
Using land contract and land trust can be very effective ways to quietly transfer ownership and preserve the low-interest rate loan. This is a win-win situation where the seller is able to get his/her home off the market and an investor can purchase a piece of property will preserving the low-interest rates on the life of the loan of the property .
For more information, please contact http://www.pillarprodeals.com