Real estate investors can place a property in a revocable living trust, assign beneficial interest to an LLC, and secure a DSCR loan at roughly 70% LTV. The process involves drafting the trust with an attorney, recording a new deed, and using loan proceeds for property reinvestment and debt payoff. Consult legal counsel to avoid tax or liability issues.
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Are you in the deal room? With your trust, you'll use that trust to secure a DSCR loan at 70% LTV. And why would you structure it this way? Your goal, step by step. You want to transfer your home into a trust, assign beneficial interest from that trust to a company called TNT Properties, get a DSCR loan at 70% LTV secured by the property held in trust, use the funds to reinvest in the property plus pay off debt. Step 1: Choose the right trust. Most real estate investors use a revocable living trust for this purpose because it avoids probate, keeps ownership private, and can make financing smoother. Alternatively, some investors use an irrevocable Double trust, but that can complicate lending because lenders typically want control over the collateral. In most situations, most lenders prefer an irrevocable living trust. Step 2: Draft and fund the trust. What you'll need: trust agreement drafted with an estate attorney. Grantor: original trust grantor, trustee: you. Beneficiary: yourself and beneficial interest assigned to TNT Property LLC. How to transfer the property: prepare a new deed, take the property from your name to the trust name. Example: John Doe Revocable Trust dated MMDI, 1999. Record the deed, file with the Maricopa County Recorder. This officially files the trust with the county. Important: don't forget to update it. Numbers are sensitive to title changes. Formidable landing before reform is to ensure the trust is effective. Step 3: Assign beneficial interest of TNT Properties. If your client names S. Forbes Carter, TNT Properties as beneficial interest, same activity is required. Assign beneficial interest to being open assignment of beneficial controlling stock. TNT Properties becomes the agent in the deal. Trust retains legal title to preserve trust advantages. Consult with your attorney to ensure the society isn't liable for customs, cultural, or any other tax-related complications. Step 4: Prepare for the BNC loan.
