Real Estate 101 and Beyond

Ya’ll know me, I like to get straight to the point and answer the question. Those of you wishing for a little more detail can read the entire article for my mundane analysis as to the why.  Warning: The “why” for this particular post is especially boring. Question: Does placing a property in a land trust prevent a lender from calling a loan due under the due on sale clause per Garn-St. Germain? Answer: No, the use of a land trust (as used by real estate investors) will not prevent a lender from calling a loan due when there is a change in title via a land trust. The key to this answer is the part where I said, “as used by real estate investors”. Investors like the idea of purchasing property “subject to” the loan due to the deal structure requiring little to no money down, no big down payment, no loan qualification, no financing costs, etc. I get it. The problem with this investment strategy is that once title is transferred without the loan being paid off ...

Wouldn't it be nice if you could ask a quick question, get input on a great idea that popped in your head or just make sure you aren't totally screwing something up without calling, leaving a voicemail or posting on some obscure forum hoping the person responding is some sort of authority on the subject? Well, if that question, idea or concern has anything to do with Land Trusts then you are in luck. I just created a Facebook group called Land Trusts For Investors to serve this purpose. I will moderate it for you guys and try to make sure the content posted by members stays accurate, up to date and  of course - legal. Anyone can join and post. The more comments, questions and ideas posted by you guys the more we will all benefit. I'm excited to see how this goes. Click HERE to join!

A few short weeks ago, the number one question from land trust clients was how to handle the filing of profits and losses for their properties held in land trusts- twas’ the season. At first, this would seem like a question requiring a long drawn out answer from a very sophisticated accountant; however, like most things simplified with the use of a land trust – it’s not. A land trust is a f ully revocable grantor trust, which is therefore considered a “pass-thru entity” or “disregarded entity ” under the Internal Revenue Code meaning all profits and/or losses pass through to the beneficiary . All the tax advantages of individual ownership may be retained when a land trust is properly used to hold title to real property. So…if you want profits and losses to pass through to your individual tax return make yourself the beneficiary; if C-Corporation tax consequences are desired, place the beneficial interest of the trust in a C-Corporation, etc. Simple.

In the mind of a real estate investor there are a million and one ways to structure a deal and get it to closing. I really and truly believe that statement. However, there are times when a real estate investor can be too smart for his or her own good. I’m talking about “creative financing”. GASP! When the term creative financing is thrown around it’s usually in the company of other terms like contracts for deeds, installment contracts, lease options, agreements for deeds, etc. Almost always, these terms are being considered because the person extending the credit doesn’t want to deal with the hassle and expense of foreclosure in the event of default.   Rightfully so, but there are times when you just have to bite the bullet, roll with the punches, take your punishment like a man… you know what I mean. I’m going to make this really easy and really clear. You cannot avoid foreclosure in Florida. That’s it. I don’t care what fancy name you give it or what secret document you...

1     1.     What reasons do I need to file an eviction? You can file an eviction if a tenant refuses to vacate the premises after the service of a proper notice to the tenant.  Whether or not a notice is “proper” is determined by law and by the lease.  Different types of notices are required depending on the reason for the termination.  For example, a notice that terminates due to the nonpayment of rent is a different notice than a notice based on criminal activity. You must consult the landlord tenant statute found HERE .       2.     How do I begin an eviction? All evictions begin with a proper notice that tells the tenant to vacate the premises.  Once the notice expires, an eviction complaint is filed with the Clerk of the County Court.       3.     Can I evict a tenant who has children? You can evict any tenant who fails to comply with the lease.   ...

Considering the shortage of money and abundance of bad credit it’s no wonder these two terms are coming up more often. I’m not here to teach you how to broker either one of these deals, but rather just set you straight on what they are, define/clarify some terms   and offer my input on   some of the benefits, risks, etc. First and most importantly , let’s get the language down first.   A subject to deal is not the same as an assumption which also means the terms are not interchangeable.   Please… stop doing this. You will get yourself into major trouble by promising a deal using one term when what you are really intending to do is another – innocently or not. SUBJECT TO MORTGAGE A subject to deal is when you agree to purchase a property subject to the existing mortgage already attached to the property. This means the existing loan will not be satisfied at closing. In a conventional deal, that existing mortgage would be paid off at closing and a satisfa...

If you are not familiar with the new CFPB requirements you better get that way. Any closing involving a loan will be very different. As a real estate agent, investor, closer, attorney, etc., get ready. If you are prepared the transition will be much smoother.   As a result of these CFPB requirements taking effect October 3 rd , the Far-Bar As-Is Contract all investors know and love has changed. The changes to be noted and things to consider are as follows: I. When to use the new Far Bar As-Is Contract The new Far-Bar should be used on any deal in which Buyer will be submitting an application for a loan on or after October 3 rd   .  Keep in mind, “any loan” involves those loans with conventional financing. This does not apply to private or hard money loans. II. What Has Changed In order to keep this blog from being pages and pages long let me caveat this section by saying that I am giving the very short version of what has changed in each section. You must r...