How Do You Proceed In A Land Trust? Part I: In The Beginning...Making The Right Decision

Say you picked up a residential house just recently and you did not realize what a great deal you have. You knew you had a lot of equity in there, but you really didn’t realize what a great deal it truly was. So you have gone ahead and gotten the deed. And the next step is to file it in a land trust. So you should be clear, right? So what is your concern? The previous owner is still occupying the home. Well, this could pose a slight problem. nAs far as repairs, you need to determine if it is mainly cosmetics (painting on the inside and out, carpeting and possible landscaping), or if there are more extensive repairs that are needed. Once you have determined the amount of repairs needed you might want to decide if you would like to keep the home for yourself, or whether or not you will need to market it to qualified buyers (and pre-qualified buyers) who are looking for a good home. Now keep in mind, you cannot put any kind of sign up while the owner is still living in the home! nWhoa! Before you go any further you need to think about your exit strategy. If this is one that feels like you want to get in, get some repairs done, and get out quickly (and take your couple hundred thousand dollars worth of equity and blow part of it on having a good time before going to your next deal), then you need to do just that. But you also need to think about value of the property increasing. If the area is hot-then do you stand the chance to increase your return for 10, 20, or even 30 percent? This could be one of the ones where you have to really stop and think do I really need to sell this? Frankly, those are the ones that I would have to think long and hard about getting rid of. Think about it-with the property values going up like they are what you might want to take a look at is a couple of different alternative exit strategies. You could do the work for equity where someone would pay you less of a down payment to move in, let them purchase their own carpet, or do their own paintwork or something like that in exchange for not having to put as much down payment money up then at some point and time (whether it be in the next few months or the next few years), try to see if they can get approved for their own financing and sell it at top market value. nn