Buying HUD homes with an land trust

If you are making a legitimate HUD purchase (not pretending to be an owner-occupant)you can resale a HUD home on the very same day you take possession of the home.
What is it you are trying to accomplish?

you cannot change the buyer's name after an offer is accepted. Unless HUD specifies that the property will be owner occupied (you sign a document stating so), you can sell the property to an investor after you close.
You cannot assign a HUD property.

http://www.hudpemco.com/wp-documents/forms/1a2a_forms/ATL-AddRemovePurch...

first, thank you for the responses. Thanks for the response. bigJim just to clarify, I only by HUD properties as an investor. I do not pretend to be an owner-occupied buyer. The reason why I'm asking this question as I won two auctions at the same time. Don't have the funds to purchase both. I'm thinking if I could buy them in a land trust, and if I wanted to unload one property or both. I could sell the land trust in a sense an assignment.
hi, Valerie, I understand what you're saying and that issue, but I am not changing the name the landlord's name would stay the same. The owner of the land trust would be could be a different person. Again, thank you for the response.
Of also found sometimes in the past. HUD won't let an investor. We sell the property for 91 days after purchase date. do not like investors, and they tried to discourage the flipthis actually hurts HUD because if I have to hold up at least 90 days. This reduces my buying based on a longer hold, but nobody said government was smart.

Have a great investing day

Reuben

When a property is foreclosed, the investor would need to eliminate this property as presently as doable. Maintaining foreclosed properties entails further prices. Lenders would sell foreclosed properties to not profit however to recover the unpaid mortgage loans. Foreclosed homes area unit eventually sold at auctions at costs abundant under their current market values. This interprets to large savings for business for sale
and extra profit for investors.

I use Land Trusts now for ALL of my deals. It is a much more effective way to transfer real estate without ever losing a deal because of deed restrictions and the "no assignment clause" on short sales, REOs and foreclosures.

A Land Trust is a wholesalers best friend

about how to do a land trust then? Thanks, Tammy

I'm going back to the original question here, there have been some very enlightening responses and added information in this string, thanks to all those who have posted.
In the original question, Reuben asked: "can I purchase HUD homes with a land trust after my bid is accepted." The answer to that, I believe, is a qualified yes.
It is correct that HUD will not allow an assignment; however, this does not have to be presented as an assignment. Federal and state governments allow that a transfer of a property from an individual into a land trust where the grantor is the same as at least one of the beneficiaries is not considered to be a transfer of ownership that would be subject to real estate transfer taxes.
The same precedent should apply here. (Remember, I'm not an attorney, so this is personal opinion that should be substantiated with a local attorney). The buyer on a contract, after the contract has been accepted, can submit an amendment request indicating that the purchase will be in the name of a land trust, and that the grantor is the same as at least one of the beneficiaries.
Amendment requests can be accepted or rejected, but since the amendment does not technically assign the agreement to a different buyer (per the above ruling) there is a high probability that, if explained correctly, the amendment will be accepted. This has also been used with HUD with amending the purchase into an LLC, even though government does not view a transfer into an LLC in the same way that they view the transfer into a Land Trust.
I am aware of transactions where this transfer has been done, but am not in any way guaranteeing the acceptability of this to HUD. After all, they are a government agency, and government is not known for being efficient, logical, or even necessarily intelligent in the decisions that they make. Best wishes!

Here is what you do...

If offer is accepted tell the Agent that you want to put the deed into a Land Trust therefore the Land Trust must become the purchase entity ( the buyer)
After amendments are drawn up stating the Land Trust as buyer and is endorsed by seller all you need to do is assign the beneficial interest of the Land trust to your buyer and get paid. You then resign as Trustee after closing and the buyer nominates another Trustee for the trust.

Pretty simple process really

Carol's information is excellent and very helpful. I would make one recommendation, and that is that with any land trust, you make the trustee someone other than yourself. Having yourself as grantor, trustee, and beneficiary would call into question the validity of the trust. Since this is a very temporary arrangement, you can designate a friend or family member, who will then resign, or be replaced with a new trustee once the transfer of beneficial interest has taken place. Small modification, but can help with the process.

for the breakdown! Much appreciated!

I'm finding some interest lately on the use of Land Trusts. While we generally refer people in the direction of an LLC for business purposes, owners of rental properties, or any other long-term hold may wish to look into the use of a Land Trust. Simple to set up, and easy to use for transfer of ownership, these entities also have the added benefit of not being considered a transfer of ownership if the grantor is the same as one of the beneficiaries. That means if you own a property that is an investment property in your own name, you can transfer it into a land trust for the protections of privacy and asset protection without incurring any real estate transfer taxes. I encourage you to look a little more into these ownership vehicles if you hold properties for longer than a 90 day fix up and resell.

1) Does each Land Trust have to be set up through an atty or is it something that you can do yourself?

2) I am assuming that things may also vary according to state?

3) Any ideas on what approximate costs of setting one up might be?

Thanks!

Karen

http://www.landtrustsmadesimple.com/

Good Luck!

Thanks guys n gals I am going to start making offers on HUD props since I partnered up with some folks who are going to be putting the emd down & I will be putting them under contract, so thx. really good stuff

First, thanks to Trey for providing that link. I checked the link, and although Randy Hughes is offering a product, he does have a fairly robust Question and Answer Forum that is worth perusing. Some of his answers are terse, which is usually someone saying "buy my program to get more info," but he is a credible source of info and may answer most of the questions people have on land trusts.
Answers for questions for Karen:
Karen:
1) Does each Land Trust have to be set up through an atty or is it something that you can do yourself?

Response: I would answer this the same way I would on forming an LLC. For my first entity of this type, I would go to an attorney for assistance in setting up the entity. If you find an attorney who is experienced with land trusts, you will have a very thorough job done in creating the trust agreement, and the trustee agreement. Being a do-it-yourselfer type, I view this as a template that can be recreated many times over for each future land trust.

Karen:
2) I am assuming that things may also vary according to state?

Response: There are variations in the use of land trusts from state to state, but most states, if not all, accept a version of what is called the Illinois Land Trust, so if you are reviewing information related to land trusts, and it references this particular type, they were the originators of the common current land trust in the U.S.

Karen:
3) Any ideas on what approximate costs of setting one up might be?

Response: Hard to say what an attorney would charge, similar or less than they would for creating an LLC. Once you have done it once, the cost should be limited to filing fees.

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