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Better Than a Lease to Purchase?
Think about this, if you could transfer the full benefits of "fee simple real estate" to another party, without requiring
the new party to get a new loan, how many more potential buyers would become available to you? There are a plethora
of people that wish they could own a home, but cannot get financing right now for various reasons.
What would be your alternatives, should you find yourself in a "must need to sell" or "get relief from the payments
now" situation. Perhaps you have thought about renting or, even worse, do a lease option. As you
will find out, neither of these will give you the advantages of simply doing a transfer of the benefits of "fee simple real estate"
What would happen if you decide to lease the property? You may find that rentals are abundant and the rents are probably way
lower than your mortgage payment forcing you to make part of the payment. Often renting a property can still leave
you with a negative cash flow, especially when you factor in vacancy, repairs and maintenance rates. Renting has many
disadvantages, especially if you are not living right near the property.
You need to know what the tenant is doing. Are they doing their part to maintain the property? Are they keeping the yard
up? What to do if they don't make a payment? And so on. Then you have the repairs and up keep to pay for.
You can do a lease option on the property, but you may be face with the above problems, plus, if the tenant buyer does not follow
through, you are still stuck with the property. And, the tenant buyer may have left the property a real mess for you to clean up. If you have
relocated, you will need to hire someone else to do this. Plus, you can find yourself in a nasty legal situation with the
tenant buyer. It has been stated, that a large portion of standard lease option contracts fail.
There is a solution to this...
But first, the primary questions are:
Can you leave you current loan in place and let us make the mortgage payments?
Are you in a position where you could leave most, if not all, the equity in tact?
These are tough questions with tough decisions.
But, if you can leave your loan in place and leave most, if not all, your equity in tact, you can
transfer the full rights of "Fee Simple Real Estate" to another party without having them acquire a new loan. While
described in more details below (see "How it All Works, Simplified"), we will
place a party, upon your approval, to live in the home and they will be referred to as the resident beneficiary.
What does the "transfer of full rights of fee simple real estate" mean? It means we can put the
responsibility of the property maintenance and repairs on the resident beneficiary. This same resident beneficiary becomes
completely responsible for the mortgage, taxes and insurance for this property. They get all the risk and burden of home ownership.
We use a collection company to handle all payments from the resident beneficiary and make payments to the mortgage holders.
If the resident beneficiary, for any reason, breaks any condition of the contract, we pay to evict them. You are
never bothered by payment collection issues, making repairs, doing maintenance, etc.
With this process, we collect a larger than usual upfront money, completely refundable, from the resident beneficiary. In return,
they are given all the benefits of "Fee Simple Real Estate". This is a comprehensive agreement, which includes the
"first right to purchase" for the resident beneficiary at the termination point of the agreement.
Get a full price offer
Why You Should Consider Our Unique Transfer of the Full Rights of "Fee Simple Real estate"?
You know the real estate market is quite rough these days, buyers are hard to flush out and properties move slow. Our unique method to transfer
the full rights of "Fee Simple Real Estate" can find more potential buyers than just doing a straight sale.
Consider this; if you are set on only looking at a cash purchaser, at the closing table, you are probably going to get considerably less for
your house than you would get on our offer based on profitable terms.
Is this you?
An example of a normal cash real estate transaction would be:
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Asking price:
Minus fluff (price negotiation, fix-up, etc:)
Real Estate Commission: (6%)
Closing Costs: (2.5%)
Marketing Costs:
Total:
Net from Sale:
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$400,000
-$20,000
-$24,000
-$10,000
-$2,000
- $56,000
$344,000
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(Note: the examples above are for purely illustrative purposes only to reflect what could happen. Each property will be different.)
That’s
$56,000 less
than originally expected.
(If it is only $30k - $40k it’s too much!)
Make your property more profitable
By using a concept that has been successfully used for more than 75 years throughout the United States, you
can usually get much more cash in your pocket than that of a normal real estate transfer transaction. You can get a
Full Price Offer
for your home - if you will keep your current mortgage(s) in place for a few years and hold, most, if not all, your equity for
awhile. We would like up to 90 days to make all the arrangements, do our 'due diligence' and find the resident beneficiary. During
this time you can still market for a buyer, just notify us if you get a cash buyer.
By the way, once we enter into the agreement, we are, also, going to be 100%
responsible for all mortgage payments, taxes, insurance, and maintenance. Plus, up keep, improvements, damages or any landlord problems (
defaults and evictions
). Then at the end of our agreement, we will either get the property refinance or sold, pay off your loan, and return any remaining
equity you have left in place.
This is a unique “ method to transfer the benefits of home ownership” concept. This IS NOT a lease option, lease purchase
agreement or rental agreement because they do not work and are Very Dangerous!
The bottom-line is: You will come away with much more cash in your pocket then if you sold out right now.
There are no commissions*, closing costs or fees.
An example of how you could be more profitable
Take the same example property above, using this unique method to transfer the full rights of "Fee Simple Real Estate" and notice the results.
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Asking price:
Minus fluff (price negotiation, fix-up, etc:)
Real Estate Commission: (6%)
Closing Costs: (2.5%)
Marketing Costs:
Total:
Net from Sale:
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$400,000
-$0
-$0
-$0
-$0
- $0
$400,000
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(Note: the examples above are for purely illustrative purposes only to reflect what could happen. Each property will be different.)
*There may be an occasion where paying a commission or part of the closing costs is necessary to close the transaction. If
so and you agree to the commission or the costs, it will come out of your equity position at the end of the term, no cash out of pocket now.
Now, you have just made $56,000 more than a traditional sale.
The term for the agreement, at a minimum, should be 24 months, because it takes that much time for all 30,
60, and 90 day marks on the credit report to fall off. 36 months or more is ideal and will make it easier for the
resident to finance.
Also, should the resident decide that they do not want to buy, but would like the property to be sold, they will be required to remain in
the property until sold, keeping payments current.
Get a full price offer
What if I Just Want to Rent?
Renting you home is an option, but there are many pitfalls that you should be aware of.
Renters in general are poor at paying on time, will not keep the property in top shape, will keep poor maintenance, and the move out
on a whim, leaving you with a vacancy to fill.
If you think that simply renting your house will solve your problem, you
should be aware of the cost of renting. There are repairs to be made, maintenance, and the vacancy factor.
People come and go. You will not immediately fill the home when vacant.
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Property Value:
Asking Lease:
PITI:
Vacancy Factor:
Repairs and Maintenance:
Net rent per month:
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$400,000
$2500
-$2300
-$450
-$400
-$650
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(Note: the examples above are for purely illustrative purposes only to reflect what could happen. Each property will be different.)
An example of how we would do it:
Take the same property example above, using our unique method to
transfer the full rights of "Fee Simple Real Estate"
to the resident and notice the results.
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Property Value:
Asking Lease:
PITI:
Vacancy Factor:
Repairs and Maintenance:
Net rent per month:
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$400,000
$2500
-$2300
-$0
-$0
$200
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(Note: the examples above are for purely illustrative purposes only to reflect what could happen. Each property will be different.)
As you can see, you are
getting around $850 more per month
than you would if you simply rented the property. Plus, no midnight calls to repair toilets, no need to
hound the tenant to mow the lawn, etc. We will do 100% of the repairs and maintenance on your house.
The resident beneficiaries are long term lessees, plus, a contingency fund is kept to pay the
monthly payments, if, for some reason, the tenant moves out (very rare).
Get a full price offer
How does keeping the loan in place affect my next loan?
Keeping a property and leasing it out has a big affect on your ability to borrow for another home. If you
are simply renting or in to some version of a lease option arrangement, when you go to get your next loan, you will find the lender will take
70% of the rent payment as income. This is to take into account the other expenses of renting as mentioned above
With our method, we have a well use "Debt to Income" letter to give to the lender. This letter explains (
See #7 below in "some other benefits"
) why they should look at this income as 100% not 70%. If you rent your home for $2,000 per month, the lender will see the income as $1,400 per month.
But, with this process, the lender will look at the whole $2,000. This still has an effect on your ability to get a new mortgage, but much less.
Before you rent, lease option or transfer the benefits of home ownership make sure it makes financial sense first and does not cause you problems
with your future financial plans.
What about my equity in the home?
If you need some of your equity out, we can accommodate that. It does have an effect on our offer to you. In order to get you cash,
we have two choices; wait until we can find a future resident beneficiary with the cash you need or use an investor that has the cash.
Note, if you find you can wait for any equity you may have in this property, we can offer you your full asking price.
We do verify that the price is in line with the local current market values, but, unless really above market value, we accept the asking price.
If we find a resident beneficiary with the cash you are asking for, we will need to confirm the asking price is in line with
local current market values. This is done by either by a Comparison Market analysis (CMA) or appraisal. The resident
beneficiary will pay for the CMA or appraisal. The offer will be slightly below local current market value or the
asking price, whichever is lower.
In using the cash investor, a lower offer may be the result rather than a full price offer. We will need to confirm the home's value,
either by a CMA or appraisal. You may be asked to pay for the CMA or appraisal. The method chosen will be a unanimous agreement
by all parties affected. Our offer will be the lower value of the asking price or our offer based on the CMA or appraisal.
Some Other Benefits to You, the Seller
1. A legitimate "
takeover
" of one's existing loan payments, without loan assumption or violations of the underlying lender's alienation and "due-on-sale-" admonitions.
2. A
higher selling price
in most cases.
3. A faster sale and shorter escrow, since there is no waiting period for loan application, qualification, and approval.
4. Avoidance of IRS imposition of income tax on
Debt-Relief
when foreclosure or short sale is the considered option.
5.
Freedom from loan payments
which may no longer be affordable, as well as the cost of insurance and general maintenance.
6. Enhanced income and profit potential, compared to what
straight renting or leasing
could provide.
7. The ability of the homeowner to transfer income tax benefits and other benefits of ownership. Increasing the net income from 70% of
straight lease to 100% or more, very favorable to the lending institution for acquiring other properties.
8. Protection from possible injurious or malevolent actions of the "other party", due to
the recourse and tough penalties built into the system.
9. In comparison with traditional "seller-carry (OWC)
" arrangement...a shielding of the property from an errant party's tax liens, lawsuits, bankruptcy, judgment, liens, probate, and
power-struggles in a marital dissolution.
10. The easiest collection of a resident's payments; handling of disbursements to creditors; mailing to late notices; and
processing any necessary admonitions, evictions or other legal process -
the seller need never to handle these functions
.
11. Ease of eviction and avoidance of the time, anguish, and expense of
judicial foreclosure, ejectment
and quiet title actions to regain entry and possession following a tenant's default.
12. Partition of the profit potential to be derived from a future sale, while, in the meantime, someone else pays all the bills.
13. Deferred Capitol Gain tax on rental property or property held less than 2 years out of 5. You will not pay the Capitol Gain tax until the
termination time.
How it All Works (Simplified)
To get the complete details, simply fill out the form below. We will send you an E-mail with our contact information and it will ask you for
the necessary information for us to complete the offer. After the initial contact and the needed property information is
gathered we will send you a letter of introduction and a non-exclusive option to read over, no obligations whatsoever.
In the simplest form, we will ask you to place the property into an Illinois Equity Holding Land Trust for the protection of
the property and for your protection from "other parties" (see #8 above). In a separate action, we will be
named beneficiaries of the trust. Then the party that is to be the resident beneficiary will then sign a comprehensive Occupancy Agreement that
dictates their responsibilities. A unique thing happens at this point, the resident beneficiary now has the risk and burden of owners, by
being a beneficiary and then leasing the property from the trust in a triple net lease agreement. The IRS will even let them
take the tax deductions the same way any owner can (IRS Code Section 163(h)(3)(d) - 163(h)(4)(d)).
The trustee, Equity Holding Corporation, a non-profit corporation, holds a contingency fund (1 or 2 payments) to make sure that each monthly
payment is made on time. They use a collection agency to collect the lease from the resident and pay all mortgage payments.
Since no sale will transpire until the end of the agreement, usually in 2 or more years, the "due on sale" clause is not violated.
Unlike a lease option, lease purchase or other "Seller carry" scenarios, if a resident stops paying, it is a simple eviction. We handle the
eviction at our cost. In a lease-to-own situation, it is not uncommon for a resident to claim equity and force a judicial foreclosure. For our method, in the eyes of
the court, this is just a lease arrangement.
This is a beneficiary directed rust; the trustee cannot do anything without the approval of all beneficiaries.
So, ask yourself, are you willing keep your current mortgage(s) in place for a couple of years and hold your equity for awhile for a
full price offer
?
About the Non-exclusive Option:
We use a form call a Non-Exclusive Option (NEO). This is a non-binding option to acquire beneficial interest in your trust. The NEO allows us to
market your property and locate potential resident beneficiaries. You can continue to market for a buyer during our option period. We only ask
that you contact us if you sell your home. We will only exercise the option when we find a buyer that meets the requirements of the option.
Consider the option as another marketing avenue for you, which does not cost you any marketing fees. So, if you are considering our full price
offer, then...
Get a full price offer
When you fill out this form, we will send you an E-Mail with our contact information on it and the information we will need to send you a
full price offer. Once you have that, you can either send back the rest of the necessary property information and your contact information
or contact us directly to complete the offer. If the property information is complete, you will get the introduction and offer from us, otherwise, we will call to clear up
missing information. Now, you will be able to make a complete and informed decision.
We want to talk
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