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Commercial Properties into Simple Trust

Home Forums General EHTrust/EHT Topics and Creative Real Estate Financing Commercial Properties into Simple Trust

This topic contains 6 replies, has 0 voices, and was last updated by Avatar of piloto piloto 11 years ago.

Viewing 8 posts - 1 through 8 (of 8 total)
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  • #6333
    Avatar of piloto
    piloto
    Member

    Homeowner (investor) has a commercial loan (construction loan converted to permanent financing) on several rental properties. Each property (a single unit and a 2 unit) has a separate loan but are held by the same LLC.

    Questions are-

    Is there a standard letter available from NARS to alert the lender that the properties are going to be put into a Trust or to ask permission?

    Does each property need it’s own Simple Trust?

    How would this be structured?

    #32481
    Avatar of lgoudie
    lgoudie
    Member

    The owner doesn/t need to ask permission to put his property into a land trust. It’s best to not even alert the lender of this fact. And you can put more than one property into a single trust if that works for you. :)

    #32482
    Avatar of mtnwizard49
    mtnwizard49
    Member

    This is NOT correct. The owner of real residential property of from 1-4 units doesn’t have to ask permission to place his property into a land trust. The owner of COMMERCIAL property MUST request permission from the Lender. Also, the exemption from the Due on Sale Clause does not apply on commercial properties.

    While it is true that you can keep more than one property in the same trust, it is inadvisable. If you want to refinance a property, you MUST take it out of the trust, refi, then put it back in trust. Lots of extra work if you have more than one property in the same trust. Keep them separate.

    Just keeping it real…

    #32483
    Avatar of peter@amakya
    peter@amakya
    Member

    The simple trust will work, but Gary is talking about a regular loan. Form my reading of the posting, it seem to be Commercial Loan is in place. Can you clarify what type of loan it is now?

    #32484
    Avatar of piloto
    piloto
    Member

    Yes, it is a commercial loan.

    #32485
    Avatar of mtnwizard49
    mtnwizard49
    Member

    Of course a simple trust will work. However, on commercial property, like I said, no DOSC exemption and you have to notify the lender.

    #32486
    Avatar of scott_l._moyes
    scott_l._moyes
    Participant

    @mtnwizard49 wrote:

    Of course a simple trust will work. However, on commercial property, like I said, no DOSC exemption and you have to notify the lender.

    Gary is correct. In some cases the Commercial Lender will ask you to pay a “Title Transfer Fee”. This can range from nothing to up to $1000. I’ve done several commercial deals and only had to pay a lender once ($300) for the “permission” and transfer to the trustee.

    #32487
    Avatar of piloto
    piloto
    Member

    Thanks Guys.

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