The following technique is an advanced technique for investors who owners who want to sell to someone who can’t qualify for a loan. Risk in this technique is that you put the property in someone’s name and they file bankruptcy, a judgment is rendered against them and attaches to the property or they go missing. Protect yourself with a power of attorney to be able to convey property if there is a breach of contract. Also, do some investigation of their credit history to see if they would qualify for a bankruptcy.

Here is how you lock your profits, put the person on title and create a win/win for your buyer.

First: You as the owner file a deed of trust and a note to another company that you own so that the profit and equity you want to protect is covered by this lien. You have to do this before adding anyone to title so that it has priority.

Second: After the lien is recorded, you then grant the property to yourself and the person who wants to buy the house. They should pay rent in an amount equal to the projected house payment for them.

Third: Make sure that you collect rent checks not cash from the tenant/owner so that you can show the mortgage company a 12 month payment history.

Fourth: Instead of the tenant/owner purchasing the house, they are going to refinance the home thus paying off your first and second mortgages while simultaneously receiving the remainder of the property interest you held during the 12 months you have been on title together.

You cash out, your loans are paid off, their closing costs are lower because they don’t have to bring the downpayment it is in the house already. Win Win all the way around.

AH