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What is the best device to use when selling on a wrap and the existing loan has a due on sale. I believe the chances of having the loan called is slim but if it happens and you gave a deed and are no longer are in title, you can’t refinance and may have a problem. Is it best to sell on a Contract For Beneficial Interest or Contract For Option or maybe just a Lease Option? What has worked in this situation?
Also does anyone know if the buyer can homestead a property purchased on a Contract For Beneficial Interest?
The way you sell should really be determined by how fast you can get them out of the house. In some states, like Texas, it takes longer to get someone out of a house if you sell with a contract for deed than it does if you sell with a Warranty Deed. Other states require a full blown foreclosure process on a Contract for Deed.
So… you really need to know the foreclosure laws in your state to know the answer.
Jackie
If you are worried about the DOS clause the safest way to do this is to place the house in a TRUST. (Home owners do this every day for estate planning purposes) You create the trust i.e 123 MainStreet TRUST (address of the house). You are the named beneficiary of the TRUST. The home owner signs a deed over to the TRUST (check with local real estate attorney as to what type deed to use) . He is now able to buy another house as the TRUST now pays for the house. The TRUST starts making payments on the house (you do this as the beneficiary). The new “owners” do NOT get a deed until they secure some type of commercial financing… you do not want to be the bank for 30 years. They get the house under a rent-to-own program or lease/option (whatever you want to call it) and make their payments to the TRUST…you keep the spread as a management fee. Once the new buyers get a commercial loan the house is closed on like any “normal” purchase with a real esate attorney and deed transfers from the TRUST to the “owners”.
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