Land Trust Vs. Option Contract W/ Simultaneous Close

Okay, we have been performing short sales for about a year and its been trial and error all the way. We've had alot of learning curves due to the fact that we didn't follow a guru's system. Our title girl is the one who really has helped us along and we have been using land trusts and doing simultaneous closes with the end buyer funding the deals. WELL, just last night we were tuned into the teaching of "The strategic real estate coach". Their model is using "Option contracts" instead of Land trusts- well it sounded great because truthfully we were getting everything mixed up and felt we weren't being completely honest with the lenders. The problem is that they state we can not allow the end buyer funds to close out the 1st close- this is borderline fraud- scary word!!!! So someone who can assure us in what to do,we would be grateful- we need clarity. We have found it to be pretty costly with double closings (real estate fees, etc,) I haven't made alot of money like claimed but I have worked my tail off and helped people out of their situations. I'm ready to make money and do it legally and ethically!!!! Your wisdom would be appreciated!!!!

Each of the major underwriters and most of the smaller ones will no longer insure short sale transactions involving land trusts.

The option contract gives you, the investor, an equitable interest in the property and the right to market and sell.

It's also transparent . . . And requires funding for both transactions to be separate.

If you have a title company that will do land trust deals, and you believe that they are insured, then stick with 'em … the caveat being that you should make sure to pay both transactions separately.

Otherwise, go back to SREC and download their info on The Death of the Land Trust. I believe their is an outline as to how the paperwork operates - perhaps you can use your title company to create your own paperwork or attend one of their events.

Why don't you just tie the property up with the option and assign it to the end buyer? No closing is needed for you.

[ Edited by newtree on Date 04/17/2008 ]