HOW TO INVEST ‘SUBJECT TO’ AND OVERCOME THE ‘DUE ON SALE’ CLAUSE MATT THERIAULT
STEP 3
STEP 2
STEP 1
A land trust is an agreement of which one party (the trustee) holds ownership of a piece of real estate (real
property) for the benefit of another party (the beneficiary). The real estate investor opportunity being that the
transfer of real estate using a land trust is EXEMPT per the Garn-St. Germain Act. Get it? I’ll break it down to
you in three simple steps.
So, imagine you come across a great deal. You have successfully found a property that meets your criteria and
a seller that will meet your terms; And your terms being you want the property subject to the existing financing.
Good to go!
STEP 1: Your motivated seller signs a land trust naming you as the trustee. The seller is the beneficiary.
Following me?
STEP 2: Your motivated seller transfers title to YOU, the trustee (Thank you Garn-St Germain Act). As per this
action, there is no violation of the “due on sale” clause. The transfer to a trust is exempt. Excited yet?!
STEP 3: The motivated seller now assigns their interest in the trust to you. This assignment isn’t recorded,
meaning that there’s no public record of it. The motivated seller then moves out and goes on about their
business, and YOU or your tenant move in! Ta dah!
You are now the beneficiary of the trust, the beneficiary of the trust that owns th ?????????9????????????(???????????????????????????????????????????????????????????????????????]???????e?????????????()???e??5UMP???????????????????????????????????????????????????????????????????????)????????????q??????????t??????????????e???????????????????????()Q??????????????????????????????????????????????????????????????????????$????????????????)??????????????((0