Re: How do you do a Equity Buy Out?? Help
Posted by Julio Martinez-Clark on March 28, 2008 at 17:35:40:
In Reply to: How do you do a Equity Buy Out?? Help
Posted by Brian Dennis on March 28, 2008 at 13:12:23:
Brian,
In my opinion you buy equity every time you purchase a property whose
encumbering loan balance is lower than the fair market price of the
property. Some so called "gurus" (some honest ones and some dishonest
ones) have come up with the term "Equity buy out" to justify and hide some
practices (unethical and illegal in many states) such as the use of land
trusts to take over payments on properties breaching the contract between
the homeowner and the lender (due on sale clause), to wholesale
properties, etc. So, in the context that you present, an "equity buy out" is
just purchasing a property at price X and selling it at price Y providing
price X is lower than price Y. How you do it, it's another matter.
You are saying in your statement...
"I want to do it just like a short sale where I sign the contract to buy at a
certain price then flip to a retailer for a higher price at a Simultaneous
closing that way title never passes my hands"
You are already telling us how you plan to do it. Simultaneous closings are
being increasingly being scrutinized in many jurisdictions and some
attorneys/closing agents refuse to do them. I even believe there is a
federal ban on simultaneous closings as I learned last time I tried to do one
in FL and If I remember correctly I was told this by my attorney; I hope
somebody on this forum can correct me on this matter.
Last time I was in a similar situation, what I did was to sign a purchase and
sales agreement at price X and then I assigned the contract to a buyer in
which the buyer gave me an "assignment fee" of $XX per a separate
agreement with the Buyer. After much deliberation with my attorney, this
was the cleanest way to handle the transaction.
I hope this helps,
Julio Martinez-Clark
Follow Ups:
- Re: How do you do a Equity Buy Out?? Help - Brian H Dennis 09:41:38 03/29/08
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