" The benefits to me are :
1 ) Recovering my costs upfront through my markup .
2 ) The security of $ 20,000 down ( people will do everything possible to not lose that much money by defaulting on the contract ).
3 ) 7 % interest on my markedup equity .
4 ) 3.75 % arbitrage ( read , cash flow profit on the bank ' s money ) because I get a new first mortgage at 80 % of the purchase price at 3.75 %."
How do you “ be the bank ” and reduce the risk ? Use a land trust ! I like to buy houses and resell the beneficial interest in the land trust the same day on an installment contract . I buy at the best price I can negotiate , mark the price up to reflect my time , initial investment , and transaction costs , and sell to a user at 7 % with a 25year amortization and a fiveyear balloon . The number of Americans “ out there ” that would love to buy a house but need help getting into the market is tremendous . They cannot qualify for a loan now ( and maybe never ) because of myriad disqualifiers . I require at least 20 % down and payments to me , including principal , interest , and 1 / 12 the tax bill . They are required to buy their own insurance and make my trust the Additional Insured .
The benefits to me are : 1 ) Recovering my costs upfront through my markup ; 2 ) the security of 20 % down ( people will
do everything possible to not lose that much money by defaulting on the contract ); 3 ) 7 % interest on my markedup equity ; and 4 ) 3.75 % arbitrage ( read , cash flow profit on the bank ' s money ) because I get a new first mortgage at 80 % of the purchase price at 3.75 %. My benefits are many , but you should always ask yourself when doing real estate deals , “ Where can this go wrong ?” The answer is , “ If the buyer defaults , you have to foreclose .” Foreclosure is a long legal battle that will cost you legal fees , lost cash flow , sleepless nights , and 612 months of making your mortgage payments without income . How can you avoid this risk ? USE A LAND TRUST !
When I close on the purchase in the morning , I take the title directly from the seller into my land trust . Then , when I sell the beneficial interest on an installment contract later that same day . . . I sell the beneficial interest in the trust ( which is personal property in the vast majority of states .)
This is a private transaction that is not recorded and does not cause a “ cloud on my title .” If the buyer defaults , I repossess the beneficial interest . . . I do NOT have to foreclose ! Repossession takes about 30 days , and I can do it myself . If the buyer does not vacate voluntarily , I evict them under a monthtomonth lease situation .
The land trust will serve you well in many ways . The methods described above are only two of many techniques to make money , create safe cash flow , and keep your name out of the public records using a land trust . Learn all you can about land trusts . . . they will make you tons of money !
I encourage you to learn more by going to my FREE online training at
www . landtrustwebinar . com / 411 and texting the word “ reasons ” to 206203 2005 for my free booklet , Reasons to Use a Land Trust . You can also reach me the oldfashioned way by calling me at 217 3551281 . ( I actually answer my own phone , unlike most other businesses in America today !)
" Foreclosure is a long legal battle that will cost you legal fees , lost cash flow , sleepless nights , and 612 months of making your mortgage payments without income . How can you avoid this risk ? USE A LAND TRUST !"
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